Income tax for Housing Society

We are members of a Group Housing Socity. Our Society is having about  300 members. Our Collection of Maintenance charges are about Rs. 400 lacs, and expenses (Administration,Security and other relevant are  about Rs.410 lacs. No tax is payable moreover Housing society income is tax free.

We are also making interest Income of about Rs.30  lacs on our Deposits, we are paying income tax on interest income as income from other sources, without any deduction.

Can we claim a prorata of  our expenses (administrative Expenses)  against income from Interest because administration office has to do work for making Fixed deposit etc. refer (2024) 165 taxman.com 508.

 

Replies (1)

Generally, expenses incurred for earning interest income can be claimed as deductions. 

Since the administration office works for making fixed deposits (earning interest), a proportionate part of administrtive expenses migh be allowable against interest income.

As per the reference (2024) 165 taxman. com 509, there might be scope for claiming a prorata of expenses against interest income. So determine exact prorata of expenses allocable to interest income. 

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