Income tax liability for public fund by coupon

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49 Points Joined June 2019
one of my client have planned to offering his house for rs 50 lakh and the fund collection through issuing 4000 coupons of rs 1000 to the public
what are the income tax compliences for this type of transaction?
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On 23 August 2024 at 15:34 Report
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Master in Accounts & high court Advocate
9113 Points Joined December 2011

A unique situation! Let's break down the income tax compliances for your client: 1. *Taxable income*: The sale of the house for ₹50 lakh is a taxable event. Your client will need to report this income in their tax return. 2. *Capital Gains*: Since the house is being sold, capital gains tax will apply. Your client will need to calculate the gain (profit) made on the sale and report it in their tax return. 3. *Coupon sales*: The issuance of coupons worth ₹1000 each to collect funds from the public is essentially a form of crowdfunding. This will be considered taxable income for your client. 4. *Business income*: If the coupon sales are deemed to be a business activity, your client will need to report this income under "Business Income" in their tax return. 5. *TDS*: If the total amount collected through coupons exceeds ₹50 lakh in a financial year, your client may need to deduct TDS (Tax Deducted at Source) on the interest component. 6. *GST*: If the coupon sales are considered a supply of services, GST may apply. Your client will need to check if they need to register for GST and collect tax on the coupon sales. 7. *PAN and TAN*: Your client should have a PAN (Permanent Account Number) and may need to obtain a TAN (Tax Deduction and Collection Number) for TDS purposes. 8. *Tax returns*: Your client will need to file their tax returns (ITR) and report all the income from the

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On 26 August 2024 at 13:21
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49 Points Joined June 2019
Thankyou sir
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On 27 August 2024 at 14:12


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