ITR Form to be used for filing the income tax returns of Apartment Owners Associations? - Professionals - Taxation - TIK Share
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ITR Form to be used for filing the income tax returns of Apartment Owners Associations?


Rahul Rai

2014-08-15

Hi, my question is related to Housing maintenance accounts. One of the client is Apartments Owners Association.

The transaction this association does are:

Collecting maintenance charges from aprtment dweller and maintenance the facilities.

They sometime also receive in excess of maintenance charges.

My questions are:

Which ITR form should i use to file the Income tax returns?

If the receipts during the year cross 1 crore, then tax audit under section 44AB is applicable?

Vedanta Deshika

2014-08-15

Maintenance charges recieved from the residents is in the nature of Mutual Income. The amount is spent for the benefit of the members. Hence, any income recieved and any surplus out of the income is a mutual income which cannot be taxed. However, if the association earns interest or dividend from investing the amounts in Fixed deposit/Shares/Mutual funds etc., this income is not in the nature of Mutual income and hence would be taxable. Association cannot be grouped as a co-operative society since its not registered under Co-operative societies act, it can neither be called an artificial judicial person since these apartments are registered under state acts for society registration. Hence, these societies would be taxed as an AOP and ITR-1 would be applicable to them. Tax audit would not be applicable to them since amount recieved as maintenance charges would not be considered as turnover/gross receipts for that purpose. 

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