Ngo-society- taxation
This query is : Resolved
27 February 2016
Dear sir, I registered a society(state based) under society registration Act 1860 in April 2014 & didn't get registration in 12A for income tax purpose. Since then only its secretary & treasurer (both spouse) have contributed approx 150000 in financial year 2014-15 from their own pocket towards expenses of public welfare like-training to women for sewing machine,etc. Now please suggest : 1. Which ITR form should i fill up? 2. Who will sign ITR Form ? Can Secretary do so ? 3. Can society get basic exemption limit so that its taxable income become NIL? Please give your valuable suggestion.
27 February 2016
1. You need to file ITR-5
2. Yes the secretary can sign
3. the slab rate for society are different from the individual slab rates. so you gotta check what is the net income first.
2. Yes the secretary can sign
3. the slab rate for society are different from the individual slab rates. so you gotta check what is the net income first.
02 March 2016
Thanks Nikhil ji. The net income of society is zero. It has earned nothing. Only capital has been contributed towards expenditure of Society by secretary & treasurar.
02 March 2016
then just go ahead and file ITR-5
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06 March 2016
Sir whether Society registered under society act 1860 will be treated as AOP or Artificial judicial person? plz clarify me as while i m registering user for itr filing i have to choose my "USER TYPE"
03 August 2024
For a society registered under the Society Registration Act, 1860, here’s how to handle the taxation and filing of income tax returns:
### **1. ITR Form to be Filed**
**Form to Use:**
- **ITR-7**: This form is used by persons including societies and trusts claiming exemption under sections 11 and 12 of the Income Tax Act. Since your society is not registered under section 12A yet, you should still use ITR-7 for the society’s income tax return.
### **2. Signing the ITR Form**
**Who Can Sign:**
- The ITR-7 form should be signed by the **President** or **Secretary** of the society. In your case, either the Secretary or Treasurer can sign the form, but typically, the President would be the authorized signatory. If both are spouses and there is no President, then the Secretary can sign the form.
### **3. Basic Exemption Limit**
**Tax Exemption:**
- **Basic Exemption Limit**: Societies are eligible for the basic exemption limit, which is ₹2.5 lakh for individuals, but there are specific provisions for societies. Since your society’s net income is zero and no income has been generated, it should not be taxable.
- **Section 11 and 12**: If the society had registered under section 12A, it would be eligible to claim exemptions under section 11 and 12 of the Income Tax Act, which covers income derived from charitable or religious activities. Since the society is not yet registered under section 12A, it is still eligible for exemptions, but registration is advisable for long-term benefits.
### **4. Treatment of the Society**
**AOP vs. Artificial Judicial Person:**
- **Artificial Judicial Person**: A society is generally treated as an artificial judicial person and not an Association of Persons (AOP). In the ITR filing system, you should select the option that best matches this description.
### **Filing the Return**
**Procedure:**
1. **Prepare the ITR-7 Form**: Fill out the ITR-7 form with the details of the society. Include details of contributions and any expenses if applicable.
2. **File Online or Offline**: You can file the ITR-7 either online or offline. If filing online, you need to ensure the form is filled correctly and validated.
3. **Attach Documents**: Attach any necessary documents such as contributions received and details of expenses.
4. **Sign and Submit**: Have the form signed by the authorized signatory (Secretary or Treasurer). If filing offline, submit it to the local Income Tax office. For online filing, follow the submission process through the e-filing portal.
### **Additional Recommendations**
- **Register Under Section 12A**: To avail of tax benefits and exemptions in the future, it is recommended to get the society registered under section 12A. This registration provides the benefit of tax exemptions on income generated from charitable activities.
- **Consult a Tax Professional**: It’s advisable to consult a tax professional to ensure compliance and to handle the registration under section 12A.
By following these steps, you should be able to manage the society's tax filings and maintain compliance with the Income Tax Act.
### **1. ITR Form to be Filed**
**Form to Use:**
- **ITR-7**: This form is used by persons including societies and trusts claiming exemption under sections 11 and 12 of the Income Tax Act. Since your society is not registered under section 12A yet, you should still use ITR-7 for the society’s income tax return.
### **2. Signing the ITR Form**
**Who Can Sign:**
- The ITR-7 form should be signed by the **President** or **Secretary** of the society. In your case, either the Secretary or Treasurer can sign the form, but typically, the President would be the authorized signatory. If both are spouses and there is no President, then the Secretary can sign the form.
### **3. Basic Exemption Limit**
**Tax Exemption:**
- **Basic Exemption Limit**: Societies are eligible for the basic exemption limit, which is ₹2.5 lakh for individuals, but there are specific provisions for societies. Since your society’s net income is zero and no income has been generated, it should not be taxable.
- **Section 11 and 12**: If the society had registered under section 12A, it would be eligible to claim exemptions under section 11 and 12 of the Income Tax Act, which covers income derived from charitable or religious activities. Since the society is not yet registered under section 12A, it is still eligible for exemptions, but registration is advisable for long-term benefits.
### **4. Treatment of the Society**
**AOP vs. Artificial Judicial Person:**
- **Artificial Judicial Person**: A society is generally treated as an artificial judicial person and not an Association of Persons (AOP). In the ITR filing system, you should select the option that best matches this description.
### **Filing the Return**
**Procedure:**
1. **Prepare the ITR-7 Form**: Fill out the ITR-7 form with the details of the society. Include details of contributions and any expenses if applicable.
2. **File Online or Offline**: You can file the ITR-7 either online or offline. If filing online, you need to ensure the form is filled correctly and validated.
3. **Attach Documents**: Attach any necessary documents such as contributions received and details of expenses.
4. **Sign and Submit**: Have the form signed by the authorized signatory (Secretary or Treasurer). If filing offline, submit it to the local Income Tax office. For online filing, follow the submission process through the e-filing portal.
### **Additional Recommendations**
- **Register Under Section 12A**: To avail of tax benefits and exemptions in the future, it is recommended to get the society registered under section 12A. This registration provides the benefit of tax exemptions on income generated from charitable activities.
- **Consult a Tax Professional**: It’s advisable to consult a tax professional to ensure compliance and to handle the registration under section 12A.
By following these steps, you should be able to manage the society's tax filings and maintain compliance with the Income Tax Act.
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