A body of persons which carries on a members’ club shall be
deemed to be carrying on a business and the gross receipts on revenue account
(including entrance fees and subscriptions) shall be deemed to be income from a
business: Provided that where not less than three-quarters of the gross receipts,
other than gross investment receipts, are received from the members of the club,
that body of persons shall not be deemed to be carrying on a business and no
part of those gross receipts, other than gross investment receipts, shall be
income.
A trade association may elect, by notice in writing to the
Commissioner, in respect of a year of income to be deemed to carry on a
business charged to tax, whereupon its gross receipts on revenue account from
transactions with its members (including entrance fees and annual subscriptions)
and with other persons shall be deemed to be income from business for that and
succeeding years of income.(deleted by Finance Act 2023 wef 1st-July-2023 )
(3)
In this section –
“members’ club” means a club or similar institution all the assets of
which are owned by or held in trust for the members thereof;
“member” means –
(a) in relation to a members’ club, a person who, while he is
a member, is entitled to an interest in all the assets of that
club in the event of its liquidation;
(b) in relation to a trade association, a person who is entitled
to vote at a general meeting of that trade association;
“gross investment receipts”means gross receipts in respect of interest,
dividends, royalties, rents, other payments for rights granted for use or
occupation of property, or gains of a kind referred to in paragraph (f) of
subsection (2) of section 3.Deleted by (FA 2025-wef 1st July-2025 S16).
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