• Income tax on income/interest earned by Apartment Owners Association (AOP)

We are Apartment Owners' Association registered in Udupi - Karnataka with 339 apartment Owners. We have registered under GST and IT and having GST registration and PAN. For the last financial year 2018 - 19 there was an excess of income over expenditure of about Rs. 19 Lacs. From July 2018 on wards Association received an interest income on the maintenance deposit kept with the builder on Rs. 3.68 crores @ 11.5% p.a. after deduction of TDS @ 10% on a monthly basis. For the current financial year also association is receiving the interest on monthly basis and there may be excess of income over expenditure during the current financial year as well. Association is collecting additional maintenance charges from the apartment owners @ Rs. 14 and Rs. 16 per sq. ft. for the financial years 2018-19 and 2019-20 respectively. 

Association has not filed any Income Tax Returns so far. What are the consequences of not filing ITR. If the ITR is filed is the association is liable to pay tax, if so on what amount? If not liable to pay tax is the TDS deducted by the builder can be refunded to the association by IT department? Please clarify.
Asked 4 years ago in Income Tax


You are liable to file income tax return. if you don't file your income tax return you can be served notice by department and further litigation. After filling the return if your TDS is more than tax liability then you will get refund from dept. If you want I can assist you in same 

Vidya Jain
CA, Kolkata
1012 Answers
58 Consultations

4.8 on 5.0

- In your case, AOP is a mutual organization but the income from other sources is taxable as in the hands of other assesses. As you have said, AOP is earning interest on deposit with builder and TDS was deducted therefore you are liable to file ITR and show all incomes in the proper head. In case of mutual organization, Income and expenditure account and application and sources of funds is prepared. The surplus is exempt if the entire income consists from the members of the association. You need to prepare proper computation of income, also select correct ITR form for AOP.


- In your case, it is mandatory to file ITR. Non filing of ITR will result in late fess, penalties, interest and litigation.

Vivek Kumar Arora
CA, Delhi
4863 Answers
1052 Consultations

5.0 on 5.0



The AOP is liable to File ITR. You may still file the ITR for FY 18-19.


Tax shall be chargeable to excess of income over expenses. Since TDS has been deducted, TDS credit shall be allowed and refund, if any, shall be granted.

Lakshita Bhandari
CA, Mumbai
5687 Answers
912 Consultations

5.0 on 5.0



Yes, the association is liable to file the income tax return and pay due income tax on the excess of income over expenditure.

Since TDS deducted on interest income, after total computation, if any refund is due, it can be refunded if the return is filed.

Non-filing of return can get you the department's notice and then return would be filed with a penalty.

I hope that this answer satisfies your requirement.



CA Hunny Badlani



Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

AOP will have to pay tax if its registered under Income tax and is getting income from other sources and in your case I dont think that you will have the defined share of your members and names of all the members so in that case the tax would be charged at Maximum marginal rate and you can claim refund of TDS deducted by your bank only if you file your income tax return.


If you dont file your return of income you can face scrutiny and penalty and also non filing fee of return of income which can range from 1000 to 10000 based on conditions.


Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4280 Answers
98 Consultations

5.0 on 5.0

Dear Sir,


Hope you are doing well !!


The AOP is liable to file ITR.


You may get a notice from department for non filing returns.


The AOP can claim the refund of tds deducted after adjusting overall liabilities if any.

Payal Chhajed
CA, Mumbai
5188 Answers
291 Consultations

5.0 on 5.0



AOP  has to file ITR

Refund of your TDS depends on you filing your ITR and it automatically lets you know the amount of Refund you are liable to receive based on providing all the requisite information. 

Non filing of ITR leads to penalties, late filing fee, interest and litigation. 

You still have time to file ITR for both the financial years. 



CA Navya Tejas

Navya Tejas
CA, Bangalore
45 Answers

Not rated

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