Dance Promotion society Taxability

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Raman Nagpal

1 Points Posted on 07 October 2024

My client is having a dance promotion society and it organizes competition for the dance from various other small groups or academies. They charge event attandance fee from these participants. Then dance competetion is held.

Nothing is taken out of the society as profit or any salary to the members of the society. They usually have surplus from the participants and the expense on the tournaments

I believe it is tax exempt activity as for the advancement of the music and dance. It is covered under Society Audit. My question is if it required audit under Income tax and also exemption under which section of the income tax. Thanks in advance for the replies.

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Quick Summary

This discussion explores the taxability of a dance promotion society that organises competitions and charges attendance fees. The society operates as a non-profit, with any surplus reinvested into events rather than distributed as profit or salary. The query focuses on whether the society requires an income tax audit and which sections of the Income Tax Act provide exemption, particularly under the framework for charitable organisations.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 07 October 2024

Based on your descripttion, the society appears to be a non-profit organization established for the advancement of music and dance, with surplus funds from participants and expenses related to tournaments. In India, such societies are generally registered under the Societies Registration Act, 1860. Regarding income tax audit and exemption: 1. Audit: As a society, you are required to get your accounts audited under the Societies Registration Act. However, you may also need to comply with income tax audit requirements if your income exceeds the threshold limit (currently ₹1 crore). 2. Exemption: You may be eligible for exemption under Section 12A of the Income Tax Act, 1961, as a non-profit organization. This section provides exemption to income derived from property held for charitable or religious purposes. Additionally, you may also be eligible for exemption under Section 80G of the Income Tax Act, which provides exemption to donations made Please note that tax laws and regulations are subject to change, so it's essential to stay updated and ensure compliance with the relevant provisions.