- Section 10AA
- Section 32(1)(iia)
- Section 32AD
- Section 32AB
- Section 33ABA
- Section 35(1)(ii)/(iia)/(iii), Section 35(2AA)
- Section 35AD
- Section 35CCC
- Under any provisions of Chapter VI-A other than:
- Section 80JJAA
- Section 80LA
(ii) Without set off of any losses carried forward or depreciation from any earlier assessment year if such loss or depreciation is attributable to any of the deduction referred to in clause (i) and
(iii) After considering the depreciation u/s 32 [other than depreciation u/s 32(1)(iia)] in the manner as may be prescribed.
Taxability of the Receipts by Co-operative Society:
Sr. no. Incomes from Instances Is it Taxable? Reason 1. Member’s contribution Maintenance charges, Municipal Taxes, Electricity/water Charges × Exempted, based upon concept of mutuality. 2. Interest Charged on Outstanding dues of members Interest on O/s income receivable × Exempted, based upon concept of mutuality. 3. Interest Income Earned on Investments made in Other Co-operative Bank Interest earned on deposits made with other Coop. Banks × 100% deductible, u/s 80P(d). 4. Interest Income Earned on Investments made in Other Investments Interest earned on deposits made with other nationalized Banks ✓ Fully Taxable 5. Dividend Income recd from Indian Co. Dividend earned on TATA Steels – Exempt u/s 10(34) till A.Y. 2020-21. ✓ Fully Taxable [from A.Y 2021-2022.] 6. Dividend Income recd from other Co-op banks Dividend recd from other Co-op banks × 100% deductible, u/s 80P(d). 7. Rental income from advertisement Hoardings Affixing Advertisement banner over roof top ✓ Fully Taxable either U/H of PGBP or IOS. Sr. no. Nature of Incomes Is it Taxable, if the income is received from Member Non Member 9. Rental from use of Open Space/ Terrace ×, based upon concept of mutuality. ✓,U/H of IFHP. ♣ SECTION 80P: Deductions in respect of Income of Co-op Soc.:
(A): Where 100% deductions is allowed:
1. Profits earned out of certain activities:
a) Banking business or providing facilities to its members
b) Cottage industry
c) Marketing of agriculture produce grown by its members.
d) Purchase of agriculture implements used for agricultural activities for the purpose of supplying them to its members.
e) Processing, without the help of power, of the agriculture produce of its members.
f) Collection & disposal of the labor of its members.
g) Fishing or the allied activities.
2. Profits earned by the Cooperative society engaged in activity of supplying milk, oilseeds, fruits or vegetables, raised or grown by its members to:
a) Other federal Cooperative soc.
b) Government or local authority
c) Government or local authority engaged in supplying milk or oilseeds, fruits or vegetables to the General public.
3. Interest or the dividend Income earned by the Cooperative society from its investments with any other Cooperative Society.
4. Income from letting of godown or warehouse for storage, processing or facilitating the marketing of the commodities
AND
(B): General deductions:-
Condition Amount (Rs.) where the cooperative Soc is the Consumer Coop Soc Rs. 100000 In any other case. Rs. 50000 ♣ Income Tax Compliances:
A Cooperative Soc is required to file its ROI in ITR 5 by 30th September of the Assessment Year. If Cooperative Society files the “Loss Return” then:-
Condition Implication If return is filed within the stipulated time, Losses Under Head“Capital Gains”,“Business Losses” can, only then be, carried forward. If return is not Filled at all Losses U/H House property, &unabsorbed depreciation cannot be carried forward. ♣ Tax Audit requirements:
1). Tax audit is compulsory if turnover of society (engaged in business) is more than Rs. 1 crore (w.e.f. A.Y. 2013-14). [ not applicable to societies which do not carry on any business.]
2). A cooperative society falling u/s 44AA is required to maintain books of accounts and other documents as per provisions of IT Act, 1961. Also, it is required to get its accounts audited by CA u/s. 44AB, irrespective of the fact that its accounts are already audited by its administrative department.
3). A Co-operative Society is subjected to audit as per Co-operative Societies Act under which it was registered. If such Society gets the accounts of such business or profession audited under such law and furnish that Audit report and a further report by an accountant it shall be sufficient compliance with the provisions of Section 44AB.
4). It is to be noted that the statutory requirement is the submission of report of audit conducted under the Co-operative Societies Act and a further report by an accountant in the form prescribed under the Section.
5). the report of audit of the accounts of a person required to be furnished under section 44AB shall: –
a). in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA;
b). in the case of a person who carries on business or profession, but not being a person referred to in clause (a), be in Form No. 3CB.
6). The particulars which are required to be furnished under section 44AB shall be in Form No.3CD.”
♣ TDS Compliances:
1. Chart Showing liability to Deduct Tax at source:
*The limit of Rs 40,000 to be read as Rs 50,000 in case the payment is made to a senior citizen.
2. As per Finance Act 2020, TDS has to be deducted u/s 194A by a co-operative society having gross receipts>Rs 50 Cr in case of payment of interest to its members and also to other co-operative societies irrespective of the fact that whether it is engaged in the business of banking or not.
It is bounded to obey the TDS provisions excepting few:
(a). No tax shall be deducted from any interest payable on debentures issued by any cooperative society u/s 193.
(b). TDS provisions u/s 194A are not applicable for interest other than interest on securities, if such income is credited or paid by a cooperative society to a member thereof or to any other cooperative society
(c). Though a cooperative society is not covered u/s 115-O i.e., not required to pay tax on distributed profit like domestic companies, TDS provision for dividends u/s 194 is not applicable
(d). Compliances of other TDS provisions like time limit for deposit of TDS, electronic filing TDS returns, issuance of NSDL generated Form 16A etc are all applicable for cooperatives.
