During the year rs. 1,50,000 was collected on the account of sinking fund. kindly let me know the tax implication.

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a, b is a Association comprising of 50 flats. The society is run by managing committee which changes in every year for the year ending 31-03-2017. Income and expenditure is as follows: e.g: common maintenance receipts 5,00,000 common expenditure (including depn) 5,40,000 --------------- 40,000 add: other income (int on deposits) 55,000 ------------ Surplus 15,000 ------------ The society also collects from the members toward sinking fund to meet major/ capital expenditure this amount is credited to capital fund in the balance sheet. The separate deposite account is created and interest is credited to the fund account. During the year Rs. 1,50,000 was collected on the accounts of sinking fund. kindly let me know the tax implication.
Replies (2)

Not clear about the purpose of Sinking Fund??

It is not taxable as it is not an income as per ‘concept of mutuality’.


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