Section 80 P of Income Tax Act "Deduction in respect of income of co-operative societies"
80P. (1) Where, in the case of an assessee being a
co-operative society, the gross total income includes any
income referred to in sub-section (2), there shall be
deducted, in accordance with and subject to the provisions
of this section, the sums specified in sub-section (2), in
computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the
following, namely :-
(a) in the case of 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 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 labour 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,
the whole of the amount of profits and gains of business
attributable to any one or more of such activities :
Provided that in the case of a co-operative society falling
under sub-clause (vi), or sub-clause (vii), 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;
(b) 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 (1 of 1956), or a corporation
established by or under a Central, State or Provincial Act
(being a company or corporation engaged in supplying milk,
oilseeds, fruits or vegetables, as the case may be, to the
public),
the whole of the amount of profits and gains of such
business;
(c) in the case of a co-operative society engaged in
activities other than those specified in clause (a) or
clause (b) (either independently of, or in addition to, all
or any of the activities so specified), so much of its
profits and gains attributable to such activities as does
not exceed,-
(i) where such co-operative society is a consumers'
co-operative society, one hundred thousand rupees; and
(ii) in any other case, fifty thousand rupees.
Explanation.-In this clause, "consumers' co-operative
society" means a society for the benefit of the consumers;
(d) 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, the whole of such
income;
(e) 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, the whole of such income;
(f) in the case of a co-operative society, not being a
housing society or an urban consumers' society or a society
carrying on transport business or a society engaged in the
performance of any manufacturing operations with the aid of
power, where the gross total income does not exceed twenty
thousand rupees, the amount of any income by way of interest
on securities or any income from house property chargeable
under section 22.
Explanation.-For the purposes of this section, an "urban
consumers' co-operative society" means a society for the
benefit of the consumers within the limits of a municipal
corporation, municipality, municipal committee, notified
area committee, town area or cantonment.
(3) In a case where the assessee is entitled also to the
deduction under section 80HH or section 80HHA or section
80HHB or section 80HHC or section 80HHD or section 80-I or
section 80-IA or section 80J, the deduction under
sub-section (1) of this section, in relation to the sums
specified in clause (a) or clause (b) or clause (c) of
sub-section (2), shall be allowed with reference to the
income, if any, as referred to in those clauses included in
the gross total income as reduced by the deductions under
section 80HH, section 80HHA, section 80HHB, section 80HHC,
section 80HHD, section 80-I, section 80-IA, section 80J and
section 80JJ.
(4) The provisions of this section shall not apply in
relation to any co-operative bank other than a primary
agricultural credit society or a primary co-operative
agricultural and rural development bank.
Explanation.-For the purposes of this sub-section,-
(a) "co-operative bank" and "primary agricultural credit
society" shall have the meanings respectively assigned to
them in Part V of the Banking Regulation Act, 1949 (10 of
1949);
(b) "primary co-operative agricultural and rural development
bank" means a society having its area of operation confined
to a taluk and the principal object of which is to provide
for long-term credit for agricultural and rural development
activities.