Tax Exemption on the Principle of Mutuality to Social Clubs & Co-operative Housing Societies/Resident Welfare Associations
(Under Income Tax & GST Law)
CA VIRENDRA K. PAMECHA, F.C.A., DISA (ICAI)
Chartered Accountant
The Income Tax Act recognizes the principle of mutuality and gives exemption from income-tax on income from such activities to which the principle of mutuality applies. The principle of mutuality is normally applicable in respect of income/surplus of:
1. Co-operative Housing Society;
2. Social Clubs;
3. Mutual Associations.
There are no specific provisions under the Income-tax Act, 1961 but, a perusal of section 2(24) of the Act shows that the Act recognizes the principle of mutuality and has excluded all activities involving such principle from the purview of the Act, except those mentioned under section 2(24)(v) and (vii) of the Act.
The book explains the tax-treatment of the entities which may be governed by the principle of mutuality. This book will help in understanding the Principle clearly so as to avoid any unpleasant situation afterwards. The working of the principle has been illustrated by many examples in the book. A large number of legal cases are discussed in the book.
As far as GST provisions are concerned, the latest amendment has been considered which brings the said transactions under the ambit of GST with retrospective effect.
This book has been prepared as self-understanding Study and Learn Kit obviating the need of a teacher to explain the subject. Still you are requested to view our YouTube channel to understand the overall concept of this topic at http://bit.ly/xcess_youtube
Please also hear the audio file given below.
