Tax deducted at source (TDS) and Tax collection
at source (TCS), as the very names
imply aim at collection of revenue at the very source of
income. It is essentially an indirect method of collecting tax which combines the concepts of “pay as you
earn” and “collect as it is being
earned.” Its significance to the government lies in the fact that it prepones
the collection of tax, ensures a regular source of
revenue, provides for a greater reach and wider base for tax. At the
same time, to the tax payer, it distributes the incidence
of tax and provides for a simple and convenient mode
of payment.
This are the most commonly credited accounts in
profit & loss account of any Co-operative Housing
Society. They are credited under different heads
namely Maintenance charges Municipal Taxes, Electricity Charges, Lift
Maintenances Charges, Water Charges, vehicle rents on behalf of its member
owning those vehicles etc.
It may be emphasized that the
society merely acts as an agent who collects this
charges on behalf of members & spends the same to meet the various joint
expenses of the society. Any surplus generated due to
these types of income is not chargeable to tax as it
is exempt based on the ‘concept of Mutuality’. The basic principle of
Mutuality is a mutual association arises when persons forming a group; associate
together for a common object and contribute money for achieving that object and
divide the surplus amongst them in the character. The cardinal requirement in
case of mutual association is that “All the contributors to the common fund must
be entitled to participate in the
surplus & all the participators to the surplus must be contributors to the
common trade. In other words there should be complete identity between the
contributors and the participators.
Where assessee co-operative
society having collected jeep rentals on behalf of its
members owning those jeeps, remitted said amount to members, it being a welfare
activity and there was no element of work contract involved, assessee was not
required to deduct tax at source while making remittance in question.
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