TaxTMI 
TaxTMI 
TaxTMI 
How the income is recognised in Time Sharing in Holiday Resorts.
The Income part consists of
1. One time Membership admission fee collected.
2. Annual Renewal fee collected
3. Usage charges collected when the room is occupied
Taxation of Time Sharing in Holiday Resorts
SHIVASWAMY H.N.
Timeshare Membership Fees Not Taxable in Full Upon Receipt; Revenue Must Match Service Periods A query was raised regarding the taxation of income from time-sharing in holiday resorts, specifically how membership fees, annual renewal fees, and usage charges are recognized for tax purposes. In response, a legal case was cited where the court held that the entire membership fee collected by a timeshare company is not taxable in the year of receipt due to the ongoing obligation to provide services over the membership period. The court determined that recognizing the entire fee as income in one year could distort financial results, as the company must fulfill its service obligations over several years. The decision emphasized the importance of matching revenue with the period over which services are provided. (AI Summary)