Under Income Tax Law, Resident welfare association (RWAs) is categorised as Association of Persons (AOP). The main objective of RWA is representing the voice, interest of the member and ensuring maintenance of the property being overlooked. Now, you must be wondering, does amount paid to RWA qualify for income tax deduction?
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Does RWA qualify as local authority for income tax deduction?Under The Income Tax Act, 1961, RWA/AOP fits in the definition of a 'Person' .It is liable to pay tax on its income earned during a financial year. Since AOP runs on subscriptions and contributions from the members.
When the RWA deposits the surplus funds in a bank/ financial institution of their choice and earns interest or dividend. Then the earned interest or dividend on the amount is taxable.
Is RWA needs to be audited in income tax act?Yes, RWA needs to be audited in the income tax act. As explained above, the income earned by RWA/AOP is taxable. Though, there is an exception to the rule. The rental received from RWA members (for common facilities) is not taxable due to the concept of Mutuality.
ITR:
In case the income received by RWA from non-members crosses the taxable limit, then RWA is liable to file Income Tax Return in ITR-5. Commonly, RWA gets TDS deducted on interest income and file ITR to claim a refund of their TDS dues.
This is all from my end on does amount paid to rwa qualify for income tax deduction.
Read more:
What is RWA society?
Types of credit cooperative society within maharashtra
What is section 194A of income tax act?
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Does amount paid to RWA qualify for income tax deduction?
Ishan
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2022-12-29T13:38:38+00:00 2022-12-29T13:38:39+00:00Comment
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