Tax on apartment association

Prabh (Querist) 13 December 2022 This query is : Resolved
Dear sir
We have formed owners apartment association managed by the members ( Owners ). we collecting monthly maintenance and incurring expenditure to meet apartment expenses like security housekeeping and other maintenance works

apart from this we had Corpus fund which we converted into Fixed deposit and we are getting interest income.

every year when we are filling return I noticed we are paying income tax on interest income at the rate of 30% + surcharge

whether tax is applicable on apartment association or lower rate of tax or it should be treated like individual and should be entitled for basic exemption of Rs.2,50,000

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Quick Summary

An apartment owners' association collects monthly maintenance and has fixed deposits earning interest. The question is whether this interest income is taxable and if the association is eligible for the basic exemption limit like an individual. While the general consensus is that the association may not need to pay tax, it is strongly recommended to consult a local Chartered Accountant for definitive advice specific to your situation.

kavksatyanarayana (Expert) 13 December 2022
No tax is applicable to your apartment. however, consult a local CA.

Dr J C Vashista (Expert) 15 December 2022
The association has sufficient funds at their disposal to engage and hire professional services of local prudent CA / lawyer practicing taxation, accordingly it do not require obligation.

Prabh (Querist) 15 December 2022
Thanks for feedback

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