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TDS for Non Profit

TDS 323 views 1 replies

kavita raheja

45 Points Joined September 2017

Hi,

Can some one help me with TDS on membership fee received to non profit organisation.

Non profit organisation is found 3 months back. And is not liable for TDS to be deducted by members.

In that case case Organisation take certificate from traces for lower deduction or nil deduction.

Any one can help please.

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9434 Points Joined December 2011

TDS on Membership Fee Received by Non-Profit Organizations Non-profit organizations (NPOs) receiving membership fees may not be liable for Tax Deduction at Source (TDS) deduction by members under certain conditions.

Key Points - *No TDS on Membership Fees*: Generally, TDS is not applicable on membership fees paid to clubs, associations, or organizations, as it's considered a contribution for mutual benefit activities. - *Section 194C and 194J*: TDS might be applicable if the membership fee is for advertisement or sponsorship (Section 194C) or professional services (Section 194J). However, membership fees typically don't fall under these categories.¹ ² ³ Certificate for Lower or Nil Deduction If the NPO is eligible for lower or nil TDS deduction, it can apply for a certificate under Section 197 of the Income Tax Act. To obtain this certificate, the organization should: - *File an Application*: Submit an application to the Assessing Officer, providing details of its income, expenses, and tax exemption status. - *Provide Supporting Documents*: Include documents such as the registration certificate, 12AA or 80G certificate, and financial statements. - *Specify the Financial Year*: Mention the financial year for which the certificate is required. Benefits of Certificate With a certificate for lower or nil deduction, the NPO can: - *Avoid TDS Deduction*: Receive payments without TDS deduction or with lower TDS deduction. - *Claim Refund*: Claim a refund if excess TDS is deducted.⁴

Recommendations - *Consult a Tax Professional*: Ensure compliance with tax laws and regulations by consulting a tax professional or chartered accountant. - *Verify Applicability*:

Determine the applicability of TDS provisions based on the organization's specific circumstances and activities.

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