31 July 2015
I have taken over as a Treasurer of an Association of Flat Owners in Bangalore, Karnataka. The Association is registered under the Karnataka Societies Registration Act. It has a Pan Card and has been filing IT returns. It places its surplus funds in Fixed Deposits with Banks and earns interest. It has been taxed on the interest income sometimes at Rates applicable to AOP and recently at MMR as BOP. My view is that the Association being non-profit purely for the purpose of maintenance of the facilities for the benefit of the members of the association the income earned by it by way of interest on fixed deposits is not chargeable to income tax. Please let me have your view.
31 July 2015
Supreme court in the case of Bangalore club says FD interest is taxable, whereas Karnataka high court took a contrary view in Canara Bank Golden Jubilee Staff Welfare Fund's case.
31 July 2015
Thank you. I am vaguely aware of the case. But I feel in case of Bangalore Club, if I remember correct it was a case the Bank itself being a member of the Club. Could you enlighten me as to the other case? Regards V.Rajagopal
CAclubindia
