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Deduction In Respect Of Income Of Co-Operative Societies. [Section 80-P]

  1. Where 100% Deduction is Allowed in respect of income of Co-operative Societies under Section 80P

  2. Where Deduction is Allowed to a Limited Eextent in respect of income of the Co-operative Societies under Section 80P :

  3. Consequences in the case of Multiple Deduction under Section 80P -

Where the assessee is a co-operative society and its gross total income includes the following incomes, a deduction shall be allowed in accordance with and subject to the provisions of this section:

(A) Where 100% Deduction is Allowed in respect of income of Co-operative Societies under Section 80P

In the case of the following co-operative societies, full deduction is allowable in respect of following incomes:

(I) Profits attributable to certain Specified Activities [Section 80P(2)(a)]:

100% of the profits, included in Gross Total Income, attributable to any one or more of the following activities are deductible to a co-operative society engaged in:

  1. carrying on the business of banking or providing credit facilities to its members; or

  2. a cottage industry; or

  3. the marketing of the agricultural produce grown by its members; or

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

  5. the processing, without the aid of power, of the agricultural produce of its members; or

  6. the collective disposal of the labour of its members; or

  7. fishing or allied activities, that is to say, 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 them to its members. [Section 80P(2)(a)]

  1. The exemption shall not be available to co-operative banks other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank.

    However, deduction shall still be available to a co-operative society which is engaged in the business of providing credit facilities to its members.

  2. However, in case of co-operative societies falling under clause (vi) and (vii) above, the deduction, is available subject to the condition that the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely:—

    1. the individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;

    2. the co-operative credit societies which provide financial assistance to the society;

    3. the State Government.

(II) Profits of certain Primary Co-operative Societies [Section 80P(2)(b)]:

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

  1. a federal co-operative society, being a society engaged in the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be; or

  2. the Government or a local authority; or

  3. a Government company as defined in section 617 of the Companies Act, 1956 or a statutory corporation (being a company or corporation 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 [Section 80P(2)(d)]:

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 investments with any other co-operative society.

(IV) Income from Letting of "Godowns or Warehouse" [Section 80P(2)(e)]:

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

(B) Where Deduction is Allowed to a Limited Eextent in respect of income of the Co-operative Societies under Section 80P :

In the following cases, the co-operative societies are entitled to deduction to a limited extent:—

(I) Co-operative Society engaged in Other Activities [Section 80P(2)(c)]:

In the case of a cooperative society engaged in activities, other than those specified in I and II of (A) above, either independently of, or in addition to, all or any of the activities so specified, the profits and gains attributable to such other activities upto the maximum limits indicated below are deductible.

  1. where such co-operative society is a consumers' co-operative society Rs. 1,00,000

  2. in any other case Rs. 50,000.

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

  2. Where the assessee co-operative society, supplied coal and diesel to its members for use in production of bricks and tiles, the society was not a 'consumer' co-operative society as the purchases by the members was not for their own consumption.

(II) Entire income by way of Interest on Securities or Income from House Property if Gross Total Income of a Co-operative Society (other than Specified Co-operative Society) does not exceed Rs. 20,000 [Section 80P(2)(f)]:

100% of the income from interest on securities or income from house property shall be allowed as deduction in case of a co-operative society not being

  1. a housing society or

  2. an urban consumer society, or

  3. a society carrying on transport business, or

  4. a society engaged in the performance of any manufacturing operation with the aid of power, provided its gross total income does not exceed Rs. 20,000.

Urban Consumer Co-operative Society means a society for the benefit of the consumers within the limits of municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.

(C) Consequences in the case of Multiple Deduction under Section 80P -

Deduction under section 80P in respect of business income of a co-operative shall be available with reference to income after claiming deduction under sections 80HH, 80HHA, 80HHB, 80HHC, 80HHD, 80-I and 80-IA.

Deductions to be made in Computing Total Income [Sections 80A to 80U (Chapter VIA)]

Related Topics...Deductions from Gross Total Income

  1. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "PAYMENT & INVESTMENT" ARE ALLOWED FROM SECTION 80C TO 80GGC

    Section 80C Section 80CCC Section 80CCD
    Section 80CCG Section 80D Section 80DD
    Section 80DDB Section 80E Section 80EE
    Section 80G Section 80GG Section 80GGA
  2. DEDUCTIONS UNDER 'CHAPTER VI-A' IN RESPECT OF "INCOMES" ARE ALLOWED FROM SECTION 80-IA TO 80U

    Section 80-IA Section 80-IAB Section 80-IAC
    Section 80-IB Section 80-IBA Section 80-IC
    Section 80-ID Section 80-IE Section 80-JJA
    Section 80-JJAA Section 80-LA Section 80-P
    Section 80-PA Section 80-QQB Section 80-RRB
    Section 80-TTA Section 80-TTB Section 80-U
 

 

 
 
 
 
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