• Taxability under the Income Tax Act

We have an association viz., VPA Sangha of a particular caste. We collect membership fee and donations for celebration of periodical pooja to the  Deity. The main expenditure is pooja and distribution of prasad.  At the end of the year there is some excess of income over expenditure to the tune of  Rs.80000 to 120,000.  This excess is being deposited in FD in the name of Sangh and utilised as and when there is shortfall of funds for pooja celebrations. As on date we have Rs.12 lakhs in FD with Bank. 

We have PAN.  Sangha is 20 years old. Never filed the IT Return. Not registered. 
Do we have to file the Incometax return? 
What are the Penal consequednces?  
What is the Exemption limit?
Asked 7 years ago in Income Tax

Yaa... u have to file the return and also claim tds

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

If your association is not registered u/s 12A/12AA, you will not get exemption in respect of the income earned by the association. Further, all the donations will be taxed at the marginal rate of taxation, i.e., @ 30.9%.

Most likely the Bank would have deducted TDS in respect of the interest on FD.

You need to file the IT Returns for the last two years and file an application before the Director of Income Tax Exemptions for registration u/s 12A/12AA and 80G, to enable your donors to claim deduction u/s 80G.

B Vijaya Kumar
CA, Hyderabad
1001 Answers
124 Consultations

5.0 on 5.0

Hello,

1. Yes, you do have to file Income Tax Returns.

2. Income earned from Bank FD's is taxable, interest shall be payable on the amount of tax and a flat penalty of Rs.5000/- per year.

3. There is no exemption limit.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Hi,

1. Yes, you need to file income tax return.

2. Penalty for non filing of income tax return can be 5000 to 10000.

3. Which exemption limit?

Kind regards,

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi,

You will have to file an income tax return. Non-filing attracts a penalty of Rs. 5000 for each return of income. Since you are not registered, you will be considered as an association of persons ('AOP') and the same tax slabs as that of a resident individual will apply to you i.e. Rs. 250,000 is the minimum amount of total income, below which no tax is payable.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LLB

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

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