Are residents welfare Associations/ Apartment Owners Associations required to obtain TAN and deduct TDS and file etds returns?
Apartment owners associations are generally registered as society under society Registration Act . Their status , whether they are registered or not is of association of person.
These apartment associations have mainly two to three types of payments like maintenance or security or professional services – which may be reason for TDS on payments to various parties. So basically , if they are covered u/s 194C or section 194I , they will be required to deduct tax.
Section 194C
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Societies registered is clearly mentions as specified persons under Explanation (g) to section 194C .If apartment owner association not registered under societiy registration act or similar acts , they ar ecovered if the accounts are required to be audited u/s 44AB
194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor
Specified Person is defined in Explanation which is as under .
Explanation.—For the purposes of this section,—
(i) “specified person” shall mean,—
(a) the Central Government or any State Government; or
(b) any local authority; or
(c) any corporation established by or under a Central, State or Provincial Act; or
(d) any company; or
(e) any co-operative society; or
(f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or
(g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or
(h) any trust; or
(i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or
(j) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or
(k) any firm; or
(l) any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person,—
(A) does not fall under any of the preceding sub-clauses; and
(B) is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor;
So , apartment owners are clearly liable to deduct tax u/s 194C
Let us See Section 194J
It starts with 194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—
So , only people who are given some relief are Individual & HUF who if not falling u/s 44AB may not deduct tax as per section 194J . But AOP , which is the status of society , must deduct tax as per section 194J
Who needs to apply for TAN
Section 203A cleal;r says all person who are required to deduct must apply for TAN and fillup TAM wherever required.
Since apartment owners required to deduct tax u/s 194C , 194J etc , they must also abide by section 203A and get a TAN