Guide to manage financial compliance in society
Co-operative finance is an crucial part when it comes to managing co-operative societies. Management committee should have an thorough understanding about financial compliance's and ensure these are followed to keep member confidence intact.
Good governance policies needs to be set to ensure that the financial transactions are clean and transparent . A good practice would be to share financial health of your organization to members Portal so they too are aware about financial health of their organization.
Management committee from time to time should monitor and maintain following registers. These registers can be easily maintained in e-governance portal to ensure transparency. Few people do follow manual records keeping which is still error prone and might cause data inconsistency causing delays in final audits of your society.
- Maintenance of Accounts Register
- Maintenance of Statutory Register
- Income Tax
Let’s see each one of above in detail.
- Maintenance of Accounts Register –
Society need to keep following book of accounts as per bye law.
1. Cash Register
2. Bank Register
3. Journal Register
4. Income & Expenses Report
5. Receipt & Payment Report
6. Balance sheet
7. Investment Register
8. Fixed Asset Register
All these registers are easily maintained in E-governance portal.
- Maintenance of Statutory Register –
Society should keep following statutory registers.
1. I Register
2. J Register
3. Share Register
4. Nomination Register
5. Mortgage Register
6. Committee Meeting Minute Book
7. General body Meeting Minute Book
8. Tenant Register
9. Vehicle Register
10. Inventory Register
Your society can very well maintain these registers in E-governance portal.
- Statutory Audit –
According to section of Maharashtra Cooperative Society Act, Every Society should get it accounts audited from Panel of Auditor. Panel of Auditor are approved by State government having required qualification and experience. Following are due dates to be remember in this regard –
- Finalization of Acts – 15th May
- Accounts to be handed over for Audit -1st June
- Audit Completion: 31st July
- Audit Report Upload – 31st Aug
- AGM Date – 30th Sept.
- Mandatory Annual Return by Society – by 30th Sept.
- Mandatory Return by Society About Auditor Appointment – One month from AGM or 31st Oct
- Online Audit Order Generation by Auditor – 31st Oct.
- Audit Rectification Report by Society: 3 months from the date of submission of report by auditor.
- Rectification Report Upload by Auditor through Audit login: Once received from Society
Auditor will verify registers maintained by society hence committee members should maintain registers mentioned above.
- Income Tax –
Cooperative Society is taxable entity under income tax act, 1961 and Cooperative society is treated as Association of person (AOP) under the act.
As per section 139 of income tax act, person whose total income exceeds the limit are required to file income tax return mandatorily. In case of society, income tax slab is started from Rs.1 to 10000. In other words, if society earn Rs.1 taxable income also then it is mandatory for them to comply with income tax procedure.
For more details on Income tax you can view our blog on Income tax - Income Tax
- TDS (Tax Deduction At Source) –
TDS is Tax deducted at source. It is deducted while making payment to vendors. Society should comply with TDS provisions. Due date for Monthly payment is 7th of next month and there quarterly return filing.
For more details on TDS you can view our blog on TDS - TDS
You can manage TDS compliance in E-governance portal very easily with detailed TDS report. TDS compliance on E-governance system can be handled by accountant even if he has basic information on TDS provisions and can capture non-compliance before TDS payment & return filing.
- Goods & Service Tax (GST) –
GST is applicable to society which has,
- Aggregate turnover 20 lakhs or more AND
- Monthly contribution exceeds Rs.7500
Rs.5000 limit includes service/Maintenance charge, Electricity charges, and Insurance contribution, Sinking Fund, Repair Fund, Non-Occupancy Charges, Late fee etc. Following contribution are excluded in calculation of Rs.7500 limit –
3. Contribution collected as pure agent
In every billing cycle raised, society should check whether to levy GST or not.
18% GST rate is applicable to housing society and SAC code is 00440245. Society can take input credit of GST paid to its vendor like Security, Housekeeping etc.
For more details on GST you can view our blog on GST - GST
You can manage GST compliance in E-governance portal very easily with return wise GST report . You can pull out gst return json from E-governance portal which can be uploaded to GST portal.
CA Priya Subodh Dodal
We at Esanchalak realize the social impact of Co-operative movement in our country shall not only stay but also grow in times to come in various sectors. Our mission is to provide efficient governance for every co-operative organization to attain efficiency and self-sustainability for the good of every member of the society.