November 2020

TAXABILITY OF TRANSFER FEE RECEIVED BY A CO-OPERATIVE HOUSING SOCIETY1

Jignesh R. Shah
Advocate

INTRODUCTION

In this article would be discussed the taxability of transfer fee received by a co-operative housing society under the principles and provisions of the Income-tax Act, 1961 (‘the Act’). A co-operative housing society (hereinafter also referred to as ‘Society’) here would include all Societies – residential, commercial and industrial. Apart from transfer fee simpliciter, the taxability of its many variants such as voluntary contribution on transfer, premium on transfer, etc. would also be examined.

 

NATURE OF TRANSFER FEE

At the outset, it is most pertinent to understand the nature of a co-operative housing society and the nature and purpose of the transfer fee collected by a Society. A Society is generally formed and registered with the following objects in its bye-laws:

 

(a) To obtain conveyance from the owner / promoter builder, in accordance with the provisions of the Ownership Flats Act and the Rules made thereunder, of the right, title and interest, in the land with building / buildings thereon, the details of which are as hereunder:

 

The building / buildings known / numbered as…….. constructed on the plot / plot Nos. …… / Survey No……… / CTS No…….. of ……….. (village / taluka) admeasuring……. sq. metres, more particularly described in the application for the registration of the Society;

 

(b) To manage, maintain and administer the property of the Society;

 

(c) To raise funds for achieving the objects of the Society;

 

(d)

--->

Keywords Search
Flip-Book Search
HTML View Search
Current Issue