The Resident Welfare Associations are societies that are formed to handle different issues and matters pertaining to its members. They act as the voice of their members and not only take care of ensuring good maintenance of the place but also represent members when and where needed on matters related to the place.
The Resident Welfare Associations take care among others, matters pertaining to its members such as administering the rules and bylaws of the association, collecting the monthly maintenance dues from the members and manage the funds of the association including its investments apart from accounting for the receipts and expenditure of the association and present the financial statements to the members.
They also are entrusted with the task of calling for and conducting periodic members meetings and also ensuring compliance with relevant statutes, viz., Municipal Rules, Societies Act Rules, Service Tax, Income Tax, Society by-laws, etc.
The compliance obligations of the society can be grouped as one time and ongoing. The one time compliance obligations pertain to issues such as:
*Society Registration- Drafting of by-laws, filing of registration documents culminating in the receipt of a formal registration certificate
* Obtaining PAN Card under Income Tax Act – This is relevant for future ongoing compliance with Income Tax Returns filings, etc.
* Obtaining TAN registration under the Income Tax Act for remittance of taxes deducted at source from various vendor/service provider payments
* Obtaining Service Tax registration under the Service Tax Act – This is relevant only for those associations that collect a monthly subscription of Rs.3,000 or more from members, since these associations are subject to Service Tax rules.
The ongoing compliance obligations pertain to issues such as:
* Conduct of meetings, maintenance of minutes of the meetings, etc.
* Modifications, if any, to the society by-laws & its registration.
* Remittance of monthly TDS amounts & filing of quarterly returns.
* Remittance of monthly service tax amounts & filing of half yearly & yearly returns, if applicable.
* Filing of annual income tax returns of the association – This assumes importance since most associations end up having refund dues of TDS amounts by their banks against interest on the association deposits placed with the banks.
*Maintenance of books of accounts of the association, including bills, receipts, vouchers, etc., which shall be needed as an internal operational requirement or even for Income Tax matters, if needed.
N. Gopalakrishnan, NGK & Associates
(The writer is a practicing Chartered Accountant and can be contacted at ‘firstname.lastname@example.org')
Keywords: Resident Welfare Association