Hi,

Our Co-op. Housing Society is under redevelopment. It is in existence since last 40 years. It does not undertake any commercial/ profit making activities. It has presently about 45 members. Subsequent to the redevelopment, about 10 New Units & hence 10 new members will be added.  Good amount of financial Reserves are presently accumulated in the Society’s accounts during last 40 years. These are invested in the Fixed Deposits of banks. The Society has decided to distribute these reserves to its existing members, thru whose contributions these reserves are generated & accumulated. The distribution ratio will be based on a suitable combination of number of members & the areas of their respective flats & not related to the number of Society’s shares held by the member.

Please advise whether on such distribution, the amount received by the member will be taxable in his/her hands Or exempt from taxation.

Regards