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:
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:
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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:
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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. |
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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. |
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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.
Sir, I have a co-operative society running in Arunachal Pradesh and registered under Arunachal Pradesh Cooperative Societies Act, 1978. So, can I obtain Tax Exemption Certificate against the cooperative society?
Income of interest on FD or saving a/c., from investment with other co-op. societies, to be shown under which head of income?