Inspector General of Registration & Controller of Stamps, Maharashtra State circular for registration of Deemed Conveyance Deed

Special Drive for Deemed Conveyance from 15/12/2012 to 30/06/2013 -Chief Ministers Appeal

Service Tax for Co-operative Housing Societies

Service as defined in this Budget:

“Service by an unincorporated body or an entity registered as a society to own members by way of
reimbursement of charges or share of contribution:–
(a) …………….;
(b) for the provision of exempt services by the entity to third persons; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex; “

1. Every Society needs to re-calculate whether it is under Service Tax purview or not. [Update on 16-June-2012]

2. Exemption of Rs.5000/month/member. An owner of Multiple Flats will almost always exceed this.

3. Almost all Income Heads will come under Service Tax purview, including Funds, Utility charges etc.

The service tax for the housing societies is paid by a resident of the welfare association of a registered co-operative society for various services provided. Each of the housing society members will have to contribute Rs.3000 per month. In most cases the service tax is paid to the contractors & suppliers. There is an exemption under Noti.8/2007, if the monthly payment per member does not exceed Rs.3000/-.

The essentials of the service tax for housing societies;

      The budget this year has implied service tax registration on all the members of a housing society and whose income is above Rs.10 Lakh/year.

·         It is important that each society has to re-calculate if it is under service tax purview or not.

·         The budget states that almost all the income heads will come under service tax purview which includes the funds, utility charges and so on.

·         There will be an exemption of Rs.5,000/month/member and a person owning multiple flats will have to exceed more than this amount.

·         The service tax for housing societies is paid for the provisions of exempt services by the entity to third persons.

·         The service tax is paid in an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use in a housing society or a residential complex.

·         It is very important that the treasurer should be aware about the entire process wherein the treasurer will collect the tax from each member along with the bill. The tax then is paid to the government on a monthly basis and returns are filed in a quarterly or half-yearly basis. The tax rate this year was changed to 12.36%. 

·         The societies which collect more than Rs. 3000 per month for a flat/apartment are taxable and the due date would be before 01-July-2012.

·         All apartment owners association registered societies which are providing services to their members based on the maintenance of the common areas, running and operation of the common utility services by sourcing the goods and services from third persons are liable to pay the service tax from 01-July-2012.

·         The income heads which are taxable before 1-July-2012 are societies with followed guidelines from their respective auditor. They ranged from highly conservative to highly liberal ones.

·         The income heads which are taxable from 01-July-2012 are the ones which levy charge to their members through ways of reimbursement of charges or share of contributions.

·         The exemption is in respect of reimbursement charge or share of contribution with an amount of Rs. 5000/- pm per member.

·         If there are commercial units in the building, the service tax is applicable to the commercial units but has no exemption applicable. The exemption will be applicable for residential units only.

·         The power of attorney can be given to the agent in case the president/secretary is not filing the application.

·         An acknowledgement is received after filing the application. The registration certificate will be received in 7 days.

·         To perform the registration process, one can seek the help of a company secretary or the chartered accountant/agent.

Establishment of District level Committee to control issues of deemed conveyance

GR IS AS FOLLOW 

Before Mutation Entry of Deemed conveyance No need to issue Notice again to concern party by Revenue Authority

GR IS AS FOLLOW 

Income Tax liability for Housing Society

The general perception of the Managing Committee of a cooperative housing society is that the income generated by the society is not chargeable to tax and therefore do not bother to file Annual Tax Return. This is a wrong perception since though certain types of income of cooperative housing society are fully exempted there are other incomes which are chargeable to tax.

The society's income is generated by the following charges:

(1) Contribution from Members:

This is the most common charges the society collects from its members to run the day to day affairs of the society. They are credited under different heads namely, maintenance, municipal taxes, electricity, lift maintenance, housekeeping, water charges, repair funds, sinking fund. etc. Any surplus generated due to these types of income is not chargeable to tax as its exempted based on the "Concept of Mutuality"

(2) Interest charged on member outstanding dues:

Interest charged by the society on outstanding dues again forms a part of contribution and qualifies the test of concept of mutuality and is exempted.

(3) Interest earned on investment:

Interest earned from any investment made in co-operative bank qualifies for deduction @100% under section 80P(d). However other interest income on investments is fully taxable.

(4) Dividend:

Dividend income received from Indian Companies is fully exempt u/s 10(34). Dividend received from co-operative banks qualifies for exemption under 80P(d) is therefore 100% deductible.

(5) Rental income from advertisement Hoardings

Rental from advertisement hoarding is fully taxable under the head Income from other sources. Expenses which can be directly associated to this earning of income can be claimed.

(6) Rental from mobile tower:

Rental from mobile tower is taxable under the head Income from House Property. Since it is considered as house property it is eligible for standard deduction u/s 24(a) @30% of the rent.

(7) Rentals from use of open spaces/terrace:

If the open space or terrace is rented to members of the society it falls under the concept of mutuality, but if rented to non-members or outsiders the rental income thus becomes fully taxable income under the head Income from House property.

(8) Non-Occupancy Charges:

Non-occupancy charges collected from members are, as per the Income Tax departments view point is a taxable income. This point is debatable and can always be argued in society's favour as in many of the honorable courts ruling.

(9) Parking Charges:

Again in this case the point to be seen is whether the collection are from members or non-members. In case of collections from members they are covered by the concept of mutuality. However in cases of societies have shopping complexes parking charges collected from outsiders would be taxable.

(10) Transfer Fees:-

Transfer Fees is also a charges and is collected from members when their is a change of ownership. 

 In conclusion it may be said that

·         It is necessary to pay income tax by the Co-operative Housing Society.

·         Co-operative Housing Societies have to file Income Tax Returns in Form No. 2.

·         It is necessary to submit returns when Co-operative Housing Society is in loss or there is no income.

·         Taxable Income is as follow:-
a. Transfer Premium and donation.
b. Income received from installing dish antenna.
c. Income received from giving premises on rent.
d. Income received from interest on dues of the members.
e. Income on deposits.
f. Income received from the sell of construction area.
g. Any Income eligible for income tax under Income Tax Act.

·         Co-operative Housing Society can deduct Income Tax amount from the amount to be given to the contractor.

·         Excess fund deposited from members than actual expenses will not be counted for income tax.

·         Further the societies are taxed as per the following slab: _

Income upto   Rs 10000                                     10 %

Income upto   Rs 20000                                     20 %

Above 20000/-                                                  30 %

·         The income tax as arrived above has to be increased by 3 % of tax payable towards Education Cess and Higher education Cess.

BANK A/C , FIX DEPOSIT, PAN & TAN OF THE SOCIETY

• As per Bye-Laws No. 114 Society shall open the Saving  Bank A/C in the nearest Dist. Central Co-Operative Bank OR Maharashtra State Co-Operative Bank OR it's Branch [This is society Main A/c(CP A/C which is transfer after Proposed Society get its Registration Certificate in the name of Reg. Society)]
• For day to day maintenance Society can open other Saving Bank A/C [if needed , else operate through main A/C only]  in the nearest Scheduled Co-Op. Bank. If A/C has to open in Nationalized Bank then prior permission of Registrar is need and normally Registrar give the permission as per Bye-Laws No. 114
• SOCIETY CAN NOT OPEN ANY A/C IN PRIVATE BANK.
• Many society close the Main A/C in Maharashtra State Co-Op. Bank  OR Dist. Central Co-Op. Bank. This is totally wrong. Once you close your Main A/C in Maharashtra State Co-Op. Bank OR Dist. Central Co-Op. Bank means that your Society is de-register.[This is happen in Mumbai where many Accountant & GDCA suggest the society to close the account from Maharashtra State Co-op. Bank OR from The Greater Bombay Dist.Co-Op.Bank]
• All long term Investment [more then 1 year] Like Sinking Fund, Share capital Fix Deposit has to be done in State OR Dist. Co-Op. Bank Only as per Bye-Laws No. 114 
• After Society get register Society has to apply for PAN & TAN No. in IT Dept. since now both are required PAN for filling IT Return and TAN for Service Tax.         

Press Note /Circular from Housing Dept. Maharashtra Regarding No requirement of NOC of Builder for Resale of Flat/Shop etc.

UID/Aadhaar Registration camps at Housing Society.

State Govt.Of Maharashtra accepts requests from Big Housing Societies & Corporate Houses to set up UID/ Aadhaar registration camps on their premises. Email your request to uid@maharashtra.gov.in after which Govt. Officials will send enrollment agencies to set it up at your premises

Charging Non-Occupancy Charges from the member of Co-Operative Housing Societies for Paying Guest. - GR.

Appointing retired government officer/employee while appointing administrator on Co-Operative Housing Societies.

Notification for New Member Voting Rights

Exemption for execution of M-20 Bond in Co-Operative Housing Society Order [ both in Marathi & English ]

Order copy:-  

Redressal of Application OR compliant of Members –

 Redressal of Application OR compliant of Members –

A member can submit application or explanatory written complaint to any member of the office bearer. Take the acknowledgement of the same by the member of the Office bearer. After receiving the complain the committee will take decision on it in its immediate meeting and thereafter that decision will be communicated to the concerned member within 15 days.

If the concerned member was not satisfied on the decision communicated by the committee, or No contact was made by the committee within 15 days in this regard, then the member can contact to the complaint redressal committee formed by the Annual General Body Meeting.

 3 Member’s Redressal Committee Structure:-

1.   Chairman/ Secretary of Managing Committee.

2.   One Woman Member of Society [Owner of Flat].

3.      One Person Appoint by General Body  [It may be Housing Society Consultant/Advocate or any other person having knowledge of Co-Operative Laws] 

If a  member is not satisfied with composition and powers of such committee, then the complainant member  can  contact the  following  authorised  officers  as  per  nature  of  the Complaint.

A-Registrar of Co-Operative Society

Matters Pertaining to following issues:-

1.      Registration of Society on misrepresentation

2.      Non-issuance of the Share Certificates.

3.      Refusal of Membership.

4.      No registration of nomination by the society.

5.       Non Occupancy charges.

6.      Demand of excess premium for transfers.

7.      Non supply of copies of the record and documents.

8.      Tampering, suppression and destruction of the records of the Society.

9.      Non  acceptance  of  the  cheques  or  any  other  correspondence  by  the committee.

10.   Non maintenance or incomplete maintenance of records and books of the society.

11.   Non preparation of the annual accounts/reports, within the prescribed period;

12.   Misappropriation/Misapplication of the funds of the society.

13.   Defaulter/Disqualified Member on the Committee

14.   Investment of funds without prior permission.

15.   Reconciliation of account.

16.   Audit

17.   Non conducting of election before expiry of the term of the committee.

18.   Rejection of Nomination.

19.   Non calling of general body meeting within prescribed period.

20.   Not calling of Managing Committee as prescribed in laws.

21.   Resignation of the committee.

22.   Any other, like matters which falls within jurisdiction of the Registrar.

B. Co-operative Court

If following types of dispute arises between member/ members and/ or member of the society which falls under Section 91 of the MCS Act 1960 such as

Dispute pertaining to:-

1.      Resolutions of the Managing Committee and General Body Meeting.

2.      The elections of   the   Managing Committee, except the   rejection of nominations, as provided under section 152-A of the MCS Act, 1960.

3.       Repairs, including major repairs, internal repairs, leakages.

4.      Parking.

5.      Allotment of Plot/ flats.

6.      Escalation of construction cost.

7.      Appointment of Developer, contractor, architect,

8.      Unequal water supply.

9.      Excess recovery of dues from the members.

10.   Any other, like disputes which falls within the jurisdiction of Co-operative court.

   C. Civil Court

Dispute pertaining to:-

1.    Non-compliance  of  the  terms  and  conditions  of  the  agreement,  by  and between the  Builder/ Developer.

2.    Substandard constructions.

3.    Conveyance Deed /Purchase Deed. (Transfer of Property)

4.    Escalation of construction cost.

5.    Any other, like disputes which fall within jurisdiction of the civil court.

D.  Municipal Corporation/ Local authority

Dispute pertaining to:-

1.    Unauthorized constructions/Addition/Alterations, made by the builder/Member/ occupant of the flat.

2.    Inadequate water supply to the society.

3.    Change of use by the Member/ occupants

4.    Building’s Structural Problems.

5.    Any other subject falls under jurisdiction of Municipal Corporation / local authority.

E. Police

Dispute pertaining to:-

1.    Nuisance carried by the unauthorized use of the flat, shop, parking space, open space in the society by the members, builders, occupants or any other person.

2.    Threatening/Assault by or to the members of the society.

3.    Any other subject falls under the jurisdiction of the Police.

F.  General Body Meeting

Dispute pertaining to:-

1.    Non maintenance of the Property of society by the Managing Committee.

2.    Non display of Board of the name of the society.

3.    Levy of excess fine, by the Managing Committee for act of the member which is in violation of the bye laws.

4.    Managing Committee’s opposition for legal utilization of available open space.

5.    Non issuing the property of the society by the managing committee.

6.    Appointment of the architect.

7.    Any other subject in the jurisdiction of general body meeting.

G. Housing Federation

Dispute pertaining to:-

a)    Denial of entry to the Secretary of the society by the members.

b)    Non acceptance of any communication by the Member/ Managing Committee

c)    Convening Special  General Meeting provided under    bye- law No. 97 and

Managing Committee meeting provided under the bye law No. 133.

d)     Any other matters.