Compulsory Filing of Income Tax Return for Every Co operative Housing Society for Financial Year 2017-18 or Assessment Year 2018-19 To Get Deduction under Section 80p of Income Tax Act, 1961

Generally , people assumed  that income of small housing society is not taxable hence there is  no need to file Income Tax return. This assumption  may be  correct  till no amendment was made in Section 80AC of Income Tax Act 1961. However Budget 2018 extended the scope of section 80AC to provide  that the benefit of deduction under the entire class of deductions under the heading “C- Deduction in respect of certain incomes” in Chapter VIA shall not be allowed unless the return of income is filed by the due date prescribed .

For section 80AC of the Income-tax Act, the following section shall be substituted, namely:—

’80AC. Deduction not to be allowed unless return furnished.—Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after—

(i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE;

(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”,

no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.’

 As per this section, Deduction u/s 80P is allowed only if Income Tax return is filed on or before due date prescribed under section 139(1) of Income Tax Act 1961. ( Due date was 30 Sep 2018 which was extended  to 31st  Oct 2018 for F Y 2017-18  i.e. A Y 2018-19).   Deduction u/s 80P 2(d) related to Interest received from Co operative Society.  Deduction u/s 80P 2(C)  allows Standard Deduction up to Rs 50,000/- if Co operative housing society having Business Income (i.e. Income from Hoarding / Advertising Income )

Every Society has Bank Account either in Co operative Bank or Nationalised Bank . Similarly every Society has Fixed Deposit either in Co operative Bank or Nationalised Bank.

  Saving Bank Interest or Fixed deposit Interest received from Nationalised Bank is taxable under the head of “Income from Other Sources” .  It means you have to file Income Tax return

 Saving Bank Interest or Fixed deposit Interest received from Co operative Bank  is  deductible u/s 80P 2(d)  only if return is  filed on or before 31st Oct 2018 for the Financial  Year  2017-18 or  Assessment Year  2018-19 as per amendment made in section 80AC in Budget 2018 otherwise Saving Bank Interest or Fixed Deposit Interest received from Co operative Bank is taxable at following rate :-

Total Income

(Rs.)

Income Tax Slab/ Rate
Upto 10,000 10% of Total Income
10,001 to 20,000 Rs. 1,000 plus 20% of Total Income
Above 20,000 Rs. 3,000 plus 30% of Total Income
Note :- Education cess and Higher Education cess 3% is levied on above tax  for A Y 2018-19.

In Short, Every Co operative Housing society has to file Income Tax return as per new amendment made in Section 80AC in Budget 2018.

Author Bio

Qualification: CA in Practice
Company: TUSHAR KARALKAR AND CO
Location: MUMBAI, Maharashtra, IN
Member Since: 08 Oct 2018 | Total Posts: 2

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14 Comments

  1. CA H. M BHUTADA says:

    I FIL UP INCOME TAX RETURN OF CO OP HOUSING SOCIETY FOR A Y 20-21 TODAY IN WHICH CLAIM DEDUCTION U/S 80P FOR Rs.50000/-AS PER 2(c) AND INTEREST AS PER 2(d) BUT IN THE FORM ELIGIBLE DEDUCTION IS NOT SHOWING THIS AMOUNT CLAIMED RETURN FILUP BEFORE EXTENDED PERIOD DUE TO COVID-19 PLEASE EXPLAIN WHY THIS ?

  2. Yogesh Mehta says:

    Even assuming that a Society has no investment income, it would need a bank account to manage operations, since all payments above Rs. 10,000/- cannot be made in cash. Having a savings bank account implies some amount of savings bank interest would accrue. Since there is no minimum exemption slab for Societies, the interest income would be taxable, but eligible for deduction under section 80P(2)(d). Kindly note that only dividends and interest income from co-operative banks will be deductible.

  3. Jaywant Patil says:

    We filled up ITR 5 for Co-op. Housing Society today and pending for submission. We observed that penalty of Rs.5000/- u/s. 234F reflected which we can not remove. The due date for filing of Return is 30/09/2019, then why penalty ?

  4. rahul says:

    cooperative housing society located in telangana, registered under AP society act, can claim deduction u/s 80 p for interest earned on fd from private nationalised bank?

  5. Ajay Khude says:

    does this extension of 31-Aug-2019 applicable to CHS. request to respond quickly as i have to answers to all owners of my society.

  6. Sharad says:

    We have filed IT for A.Y.2018-19 Audited B/s by CA of co-operative societies return situated in Kalyan (Maharashtra) on Dt.27/10/2018 as last date was extended 31-10-2018. But IT department has disallowed deduction and send notice of income tax of RS.13000/- our society total income is RS. 44000/- . Though filed in time why deduction disallowed, please help,Thanks.

  7. NARENDRA PORWAL says:

    THE RECEIPTS FROM MEMEBRS FOR MAINTENANCE CHARGES AND MUNICIPAL TAXES ETC ARE NOT TAXABLE ON THE CONCEPT OF MUTUALITY. HENCE THERE IS NO LIABILITY OF TAXATION AND FILING OF ITR

    CA NARENDRA PORWAL
    PORWAL & PORWAL LLP

  8. Ritesh Mehta says:

    What if the Housing Society has only surplus out of reimbursement of Maintenance charges collected from its members ?? No other income like Hording/ Rental etc.

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