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2. Deductions from Total Income"[ Assessments of 'Co-operative Societies' ]

 

Section 80P of the Act provides certain deductions which are to be allowed out of Gross Total Income of the society. Under the provisions of this section certain incomes which form part of Gross Total Income are to be deducted because Income-tax is not payable by the Co-operative Society in respect of these incomes.

Society 80P(1) provides that out of Gross Total Income of a co-operative society the incomes described in sub-clause (2) of this section shall be deducted.

Section 80P(2) provides that following incomes shall be deducted out of Gross Total  Income:

(a         income of a co-operative society engaged in following activities, shall be deducted:

(i)         carrying on the business of banking or providing credit facilities to its members; or

(ii)        a cottage industry; or

(iii)       the marketing of the agricultural produce of its members; or

(iv)       the purchase of agricultural implements, seeds, livestock, or other articles intended for agriculture for the purpose of supplying them to its members; or

(v)        the processing (without the aid of power) of the agricultural produce of its members; or

(vi)       the collective disposal of the labour to its members; or

 

(vii)      fishing or allied activities, i.e., the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying to its members.


For sub-clauses (vi) & (vii), 80P (2) further provides that the rules and by-laws of the society must restrict the voting right to the following classes of its members;

 

(i)         the individuals who contribute their labour, or as the case may be, carry on the fishing or allied activities;

 

(ii)        the co-operative credit societies which provide financial assistance to the society;

 

(iii)       the State Government.

 

(b)       The whole of amount of profits and gains from the business of supplying milk, oil seeds, fruits or vegetables by the members of primary co-operative society to a federal milk co-operative society, or the Government or local authorities or a Government Company.

 

(c)        A deduction of Rupees 50,000 (Rs. 1,00,000 in case of a consumer co-operative society) shall be allowed to all other Co-operative Societies which are engaged in any business which is not specified in clause (a) and (b) above.

 

(d)       Whole of the income from dividend or interest or investments of one co-operative society with any other co-operative society will be allowed as deduction.

 

(e)       Whole of the income of a co-operative society derived from the letting of godowns or by warehouses for storage, processing or facilitating the marketing of commodities shall be allowed as deduction.

 

(j)         The whole amount of interest on securities or income from house property of a co-operative society provided;

 

(i)         the gross total income of the society does not exceed Rs. 20,000.

 

(ii)        it is not a housing co-operative society, or an urban consumer society or a society carrying on transport business.

 

(iii)       it is not a society engaged in the performance of any manufacturing operations with the aid of power.

 
 
 
 
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