Summary: For the assessment year 2025-2026, cooperative societies can choose between the old and new tax regimes. Under the old regime, they are taxed at a progressive rate, starting at 10% for income up to Rs. 10,000 and rising to 30% for income above Rs. 20,000, with a 12% surcharge on income exceeding Rs. 1 crore. The new tax regime offers two primary sections: Section 115BAD for non-manufacturing societies and Section 115BAE for new manufacturing societies. Under Section 115BAD, the tax rate is a flat 22%, plus a 10% surcharge and 4% cess. For new manufacturing societies, Section 115BAE provides a concessional rate of 15%, plus surcharge and cess, to encourage new units established on or after April 1, 2023, with strict eligibility criteria regarding their formation and machinery. Both new regimes disallow many common deductions and exemptions. Once a cooperative society opts into either of the new regimes by filing a mandatory form, the choice is permanent and cannot be withdrawn. Additionally, any existing Minimum Alternate Tax (AMT) credit lapses if a new regime is selected.
Under the new regime of taxation for the AY 2025-2026, co-operative society holds similar tax rules for manufacturing and non-manufacturing concerns. Let us understand tax rates applicable for co-operative societies under old and new regimes of taxation.
Tax rates under old Regime
| Old regime | ||
| Total Income | Tax rates | Surcharge |
| Upto 10K | 10% | Total income > Rs.1Cr – Surcharge- 12% |
| >10K to 20K | 20% | |
| >20K | 30% | |
Tax rates in case of default regime – Sec 115BAD – Non-manufacturing concern
| Sec 115BAD – Resident Co-operative Society | |||
| Rate of tax | 22% + 10% surcharge + 4% cess (surcharge and cess are always added) | ||
| Other income | |||
| 111A | 15% + 10% + 4% | 112 | 20% + 10% + 4% |
| 112A | 10% + 10% + 4% | ||
| Deductions disallowed – 32(1)(iia), 33AB, 33ABA, 35(1)(ii), 35(1)(iia), 35(1)(iii), 35(2AA), 35CCC, Ch VI-A, 10AA | |||
| Deductions allowed – 80JJAA, 80LA | |||
| Other points
1. AMT credit cannot be adjusted. It will get lapse if opted this section. 2. Brought forward losses and unabsorbed depreciation pertaining to above disallowances are not allowed to be carried forward. 3. Form 10-IF is mandatory to be filed upto due date of ITR u.s. 139(1). 4. Once exercised, it cannot be withdrawn. 5. If conditions not satisfied, normal regime would apply. |
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Tax rates in case of default regime – Sec 115BAE – Manufacturing concern
| Sec 115BAE – New Manufacturing Co-operative Society | |||
| Eligibility | Sociey set up on or after 01/04/2023 and manufacturing starts upto 31/03/2024. | ||
| Should not be formed by splitting or reconstruction of existing business.
New P&M (upto 20% of total P&M can be old and imported P&M is treated as new. Building should not be used as hotel or convention center earlier. Not engaged in any other business (power generation is allowed business). |
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| Rate of tax | 15% + 10% surcharge + 4% cess (surcharge and cess are always added) | ||
| Other income | |||
| 111A | 15% + 10% + 4% | 112 | 20% + 10% + 4% |
| House property (HP) | 22% + 10% + 4% | 112A | 10% + 10% + 4% |
| Other sources (IFOS) | 22% + 10% + 4% | STCG – depreciable assets | 15% + 10% + 4% |
| Sec 24 and 57 not allowed from HP & IFOS | STCG – non-depreciable assets | 22% + 10% + 4% | |
| Deductions disallowed – 32(1)(iia), 33AB, 33ABA, 35(1)(ii), 35(1)(iia), 35(1)(iii), 35(2AA), 35(2AB), 35AD, 35CCC, Ch VI-A, 10AA | |||
| Deductions allowed – 80JJAA | |||
| Other points
1. AMT liability does not arise. MAT credit is not applicable as the Society is newly setup. 2. Brought forward losses and unabsorbed depreciation pertaining to above disallowances are not allowed to be carried forward. 3. Form is mandatory to be filed upto due date of ITR u.s. 139(1). 4. Once exercised, it cannot be withdrawn. 5. If conditions not satisfied, normal regime would apply. But if condition in eligibility 2. to 4. above breached then apply 115BAD. |
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