CCHTaxOnline - Leading Information Provider In The Areas Of Tax, Accounting and Law

Paying income tax is imperative and ensures the smooth running of the government machinery. But, there is a misconception among people that housing societies are exempt from paying taxes. In reality, there are several ways in which housing societies earn their income and most of these are subject to direct taxation . Let us examine in detail the income tax levied on housing societies.   Contribution from the members               The society needs money to keep its operations running. The lifts need to be regularly serviced and the water and electricity bills to be paid. Then there are the municipal taxes, security charges, among others. The money to pay all these charges is collected from the members. This income generate surplus which is non-taxable on the grounds of Concept of Mutuality. Rent received from advertisement hoardings and mobile towers Any money that is collected as rent from advertisement hoar...

The real estate sector is considered to be one of the driving forces of the Indian economy. It has not only been a significant contributor to the India GDP but over the years has also generated a lot of employment.With a large number of taxes being subsumed under the GST Act, the real state sector taxation has been redefined completely. When GST was introduced in July 2017, the GST on real estate was 12% with input tax credit and 8% for affordable housing projects. The input tax credit is the credit on the material used for the project. At the 33rd GST council meeting held in February 2018, rates were revised to 5% and 1% for affordable housing without input credit. Majority of the builders/developers did not appreciate the changes and wanted them rolled back, as they were more agitated with the input tax credit which the government had dropped in exchange with the new GST rates. After the developers expressed their concern about the input tax credit, the GST Council/ Government d...