Section 80P: Deduction in respect of Income of Co-operative Societies

In case of all co-operative societies, except co-operative banks (excluding a primary agricultural credit society or a primary co-operative agricultural and rural development bank), full deduction is allowable in respect of the following income:

Taxation of Co-Operative Society

A.Where 100% deduction is allowed I 100% of the profits, included in Gross Total Income, attributable to any one or more of the following activities are deductible:

  • The business of banking or providing credit facilities to its members
  • Cottage industry, or
  • Marketing of agricultural produce grown by its members, or
  • Purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or
  • Processing of agricultural produce of its members without the aid of power, or
  • Collective disposal of the labor of its members, or
  • Fishing, or any allied activities i.e. catching, curing, processing, preserving, storing, marketing of fish or purchase of materials and equipment’s in connection therewith for the purpose of supplying them to its members.
II Profits of certain primary co-operative societies:

100% of the profits, included in Gross Total Income are deductible in the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to:

  • A federal co-operative society, a society engaged in the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be, or
  • The Government or Local authority, or
  • A government company or a statutory corporation which is engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public
III Income from Investment with other Co-operative Societies:

100% of the profits, included in Gross total Income are deductible in respect of any income by way of interest or dividends derived by the co-operative society from its investment with any co-operative society.

IV Income from letting of “godowns or warehouse”:

100% of the profits, included in Gross Total Income are deductible in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities.

General Deduction To Co-Operative Societies for Income Other Than Referred Above For Other Incomes except referred to in I to IV above, there is a general deduction as under from the Gross Total Income:

1. Where such co-operative society is a consumers’ co-operative society, Rs. 100,000/-

2. In any other case, Rs. 50,000/-

Note: Consumer co-operative society means a society for the benefit of the consumers.

Tax Rates as applicable are as under:

Sr No Total Income Tax Rate
1. Upto Rs.10,000/- 10%
2. Rs.10,000/- to Rs.20,000/- Rs.1,000/- +20% on income in excess of Rs.10,000/-
3. Above Rs.20,000/- Rs.3,000/-  +30% on income in excess of Rs.20,000/-
  • Surcharge: @12% of such tax where total income > Rs 1 crore. (Subject marginal relief)
  • Health & Education Cess: is levied at the rate of 4% on such income-tax plus surcharge.

Special tax rates applicable to a Co-operative society:

Taxable Income Tax Rate
Any Income 22%
  • The Finance Act, 2020 has inserted a new Section 115BADin Income-tax Act to provide an option to the co-operative societies to get taxed at the rate of 22% plus 10% surcharge and 4% cess. The resident co-operative societies have an option to opt for taxation under newly Section 115BAD of the Act w.e.f. Assessment Year 2021-22. The option once exercised under this section cannot be subsequently withdrawn for the same or any other previous year.
  • If the new regime of Section 115BADis opted by a co-operative society, its income shall be computed without providing for specified exemption, deduction or incentive available under the Act.

Author Bio

Qualification: CA in Practice
Company: Oswal & Heda Chartered Accountants
Location: Pune, Maharashtra, India
Member Since: 27 Mar 2021 | Total Posts: 16
Anubhav has over 5 years of professional experience in handling Audit & Assurance of various entities, Direct & Indirect Tax Advisory services, Project financing, Litigation Services, RERA, Preparation and Finalization of Income Tax returns, Monthly Compliance which includes GST, TDS and oth View Full Profile

My Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Whatsapp

taxguru on whatsapp WHATSAPP GROUP LINK

Join Taxguru Group on Telegram

taxguru on telegram TELEGRAM GROUP LINK

More Under Income Tax

One Comment

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

December 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031