Taxation & Financial Advisory
Expert housing society tax services – Stay compliant, avoid penalties, and maximize savings with Quasoc’s society financial advisory!
Housing societies in Mumbai must comply with Tax Deducted at Source (TDS) and Goods and Services Tax (GST) regulations, depending on their financial transactions and revenue. Below is a detailed guide for understanding TDS & GST with Quasoc’s taxation services for housing societies.
1. Tax Deducted at Source (TDS) for Housing Societies
Housing societies must deduct TDS when making payments to vendors, contractors, or professionals if the payment exceeds certain limits. Quasoc ensures society tax compliance with TDS applicability.
| Payment Type | TDS Section | Rate | Threshold |
| Contractor Payments (Repairs, Construction, Painting, etc.) | 194C | 1% (Individuals) 2% (Companies) | ₹30,000 per invoice OR ₹1,00,000 per financial year |
| Professional Services (CA, Lawyer, Architect, Consultant, etc.) | 194J | 10% | ₹30,000 per year |
| Rent Paid (for leased office, parking space, etc.) | 194I | 10% (Building/Land) 2% (Plant/Machinery) | ₹2,40,000 per year |
| Security & Manpower Supply Services | 194C | 1% (Individuals) 2% (Companies) | ₹30,000 per invoice OR ₹1,00,000 per year |
| Interest on Fixed Deposits (FDs in banks) | 194A | 10% | ₹40,000 (₹50,000 for senior citizens) |
Key TDS Compliance Steps
✔ TDS Deduction: Deduct the required percentage before payments with Quasoc’s housing society tax experts.
✔ TDS Payment Due Date: Deposit TDS with the government by the 7th of the following month.
✔ TDS Return Filing:
- Quarterly TDS returns (Form 26Q) must be filed on time:
🔹 April – June → 31st July
🔹 July – September → 31st October
🔹 October – December → 31st January
🔹 January – March → 31st May
✔ Issue TDS Certificates (Form 16A) to vendors every quarter for transparent society tax management.
Goods and Services Tax (GST) for Housing Societies
When is GST Applicable?
GST registration is mandatory if the annual maintenance collection exceeds ₹20 lakh.
GST applies to non-members (commercial activities), and taxable services provided by the society.
GST Applicability on Maintenance Charges
| Member’s Monthly Maintenance Bill | GST Applicability |
| Up to ₹7,500 per flat | No GST |
| Above ₹7,500 per flat | 18% GST on the total amount |
Example: If maintenance is ₹8,000 per flat, GST is ₹8,000 × 18% = ₹1,440 per month with Quasoc’s society GST compliance.
GST Applicability on Other Income
| Income Type | GST Rate | Applicable? |
| Member Maintenance Charges | 18% (if >₹7,500/month) | Yes |
| Non-Member Transactions (Rent from Telecom Tower, Shops, etc.) | 18% | Yes |
| Interest from Fixed Deposits | Exempt | No |
| Parking Charges | 18% | Yes |
| NOC Charges (For resale/tenant verification) | 18% | Yes |
| Sinking Fund & Corpus Fund Contributions | Exempt | No |
| Government Grants/Subsidies | Exempt | No |
GST Return Filing for Housing Societies
If the society is GST-registered, it must file monthly or quarterly GST returns with Quasoc’s tax advisory for cooperative societies.
| Return Form | Frequency | Purpose | Due Date |
| GSTR-1 | Monthly/Quarterly | Reports outward supplies (maintenance bills, other services) | 11th of the next month |
| GSTR-3B | Monthly | Summary return of GST liability & ITC | 20th of the next month |
| GSTR-9 | Annually | Annual GST summary report | 31st December of the next financial year |
✔ Input Tax Credit (ITC) on Expenses:
Society can claim ITC on GST paid for:
- Repairs & maintenance (civil work, painting, plumbing)
- Security services
- Lift maintenance (AMC charges)
- Office supplies for society management
Exemptions & Special Cases
✔ No GST on Sinking Fund, Corpus Fund, and Interest on FDs.
✔ If maintenance is below ₹7,500 per flat, no GST is charged.
✔ GST is applicable only on commercial activities within society.
Income Tax
A Cooperative Housing Society (CHS) is considered an Artificial Juridical Person (AJP) under the Income Tax Act, 1961 and is subject to taxation based on its income sources. However, many incomes are exempt due to the principle of mutuality—meaning income collected from members for common purposes is not taxable with Quasoc’s society financial solutions.
Taxability of Income in Housing Societies
A housing society may have different sources of income. Below is a breakdown of taxable and non-taxable incomes:
A. Non-Taxable Income (Exempt under Mutuality Principle)
🔹 Maintenance Charges from Members (for water, security, cleaning, repairs, etc.)
🔹 Sinking Fund & Corpus Fund Contributions (from members)
🔹 Electricity & Water Charges collected from Members
🔹 Interest on Fixed Deposits (FDs) kept in Cooperative Banks (as per Section 80P)
B. Taxable Income
| Income Source | Taxability |
| Interest on Fixed Deposits (FDs) in Nationalized or Private Banks | Taxable |
| Rental Income (from mobile towers, banks, or commercial properties) | Taxable |
| Income from Advertisement Hoardings (in society premises) | Taxable |
| Non-Member Charges (parking, facility rentals, guest house rentals, etc.) | Taxable |
| NOC Charges, Transfer Fees (beyond prescribed limits) | Taxable |
💡 Key Point: If an income source comes from non-members or commercial activities, it is subject to income tax with housing society financial planning.
Income Tax Slab Rates for Housing Societies (A.Y. 2024-25)
Housing societies are taxed at slab rates applicable to Cooperative Societies, as per the Income Tax Act, 1961:
| Taxable Income (₹) | Tax Rate |
| Up to ₹10,000 | 10% |
| ₹10,001 – ₹20,000 | 20% |
| Above ₹20,000 | 30% |
| Surcharge (if income exceeds ₹1 crore) | 12% |
| Health & Education Cess | 4% on total tax |
🔹 Example Calculation:
If a society earns ₹1,50,000 from taxable sources (e.g., rent from a telecom tower), the tax calculation will be:
- ₹10,000 @ 10% = ₹1,000
- ₹10,000 @ 20% = ₹2,000
- ₹1,30,000 @ 30% = ₹39,000
- Total Tax = ₹42,000 + 4% Cess (₹1,680) = ₹43,680
Deductions & Exemptions Available for Housing Societies
A. Deduction under Section 80P
🔹 100% exemption on interest earned from Fixed Deposits (FDs) in Cooperative Banks.
🔹 No exemption if FDs are in Nationalized or Private Banks (e.g., SBI, HDFC, ICICI, etc.).
B. Deduction of Expenses
Housing societies can claim deductions for expenses incurred in earning taxable income, such as:
✔ Security & maintenance expenses for commercial rental property
✔ Property tax paid on rented premises
✔ Bank charges, audit fees, and professional fees
✔ Depreciation on society-owned assets
4. Income Tax Return (ITR) Filing for Housing Societies
A. ITR Form to be Used
📄 ITR-5 – Applicable for Cooperative Housing Societies with financial advisory for societies.
B. Due Date for Filing ITR
- Non-Audited Societies – 31st July of the assessment year
- Audited Societies (with turnover > ₹50 lakh) – 30th September
C. Tax Audit Requirement
If gross receipts exceed ₹50 lakh, a tax audit under Section 44AB is mandatory with housing society tax services.
