11 October 2012
One of our client is housing association.They collected funds from employees of certain group and they constructured houses after construction some amount is say 30 crores is in hand out of funds collected from members.And the 30 Cr were deposited in a bank.After all same association is looking after maintenance of appartments.and the association getting interest on 30 cr. My query is that
what is the taxation of interest if it is taxable what is the rate?
Can we get certificate for lower deduction u/s 197?
can we claim expenses of association against interest income? (i mean salaries,maintence etc) or interest is taxable with out claiming any expenses?
11 October 2012
The interest on 30 crs is chargeable under income from other sources, even though the major part of income will be income under business for the association.
The expenses of the association will be deductible against the business profit and not against this income on other sources.
The TDS under 197 will be at the normal rates by banks and since the association is having other taxable business income.
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