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Deduction in respect of income of Co-operative Societies [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 U/s 80P

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

(1)   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:

(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 grown by 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 labor of its members; or

(vii)        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)]

(2)   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

(i)            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

(ii)           the Government or a local authority; or

(iii)          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).

(3) 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.

(4)   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 Extent

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

(1)   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 1 and 2 of (A) above, either independently of, or in addition to, all or am of the activities so specified, the profits and gains attributable to such other activities upto the maximum limits indicated below are deductible.

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

(ii)           in any other case Rs. 50,000.

(2)   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

(i)            a housing society or

  1. an urban consumer society, or
  2. a society carrying on transport business, or
  3. 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.


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