Hi Everybody
We have an audit of AOP which is association of flat owners. This AOP has interest income from the corpus deposited with the bank. My question is whether the interest earned can be reduced by the maitenanace expenses of the AOP and only net income be offered to tax.
Awaiting reply from the learned members.
Thanks in advance
Sahana Murthy
Hello
I assume your AOP is a housing society:
According to Section 80P(d), interest received on funds deposited in Co-operative banks is 100% deductible.
Due to the concept of mutuality, if society derives income from maintainence charges, then such income or anything that is leftover is not taxable since it is contribution from members for benefit of members.
-Ishaan Patkar
AGREE WITH ABOVE EXPERT
Hi
It is not registered as a society and also FDs are maintained with nationalized banks and not a co-operative society.
Do let me know if this changes the above conclusion.
Thanks
Sahana Murthy
CAclubindia
