• Applicability of income tax on Residents Welfare Assocaitions

I am the owner of a flat in a society which is registered under the Karnataka Societies Registration Act 1960. the following are my questions with regard to the income of our association. We have two accounts in a nationalized bank one  account (current account) is used for depositing maintenance charges collected from members, receipts from letting out halls to members & outsiders, and payment of monthly  expenses like security, water etc. the other account (fixed deposit account) is used to deposit corpus fund contributed by the owners (currently it is one time contribution). I would like to know applicability of tax in respect of  
1 (a) Interest received from the current account is subject to tax (b) Interest earned by the corpus fund. Though currently the interest is re-invested as fixed interest. It will be utilized for for doing major expenditure (like white washing all the flats, constructing compound wall etc) at a later date.
2. If the interest from fixed deposit is subject to tax, is the entire interest is subject to tax or can the excess of expenditure over income (excluding this interest) be adjusted.
3. Will the basic exemption slab applicable.
4. Should the association deduct tax at source (TDS) from the payment made to its contractors