Deduction in respect of income of co-operative societies
54 [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 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, 55[or]
55[(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:
55a[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;]
56[(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
57(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 58[does not exceed,—
(i) where such co-operative society is a consumers' co-operative society, forty thousand rupees; and
(ii) in any other case, twenty 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 58a[***] 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 59[***] 60[section 80HH] 61[or section 80HHA] 62[or section 80HHB] 63[or section 80HHC] 64[or section 80-I] or section 80J 65[***] 66[***], 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 67[***] 68[section 80HH], 69[section 80HHA,] 70[section 80HHB,] 71[section 80HHC,] 72[section 80-I,] 73[and section 80J].]
(4) 74[***]
54. Inserted, in place of section 81 which was deleted, by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.
55. Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972.
55a. Inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972.
56. Substituted for following clause, which was earlier substituted by the Finance Act, 1978, w.e.f. 1-4-1979, by the Finance Act, 1983, w.e.f. 1-4-1984 :
"(b) in the case of a co-operative society, being a primary society engaged in supplying milk raised by its members to—
(i) a federal milk co-operative society ; 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 to the public),
the whole of the amount of profits and gains of such business ;"
57. For definition of "Government company", see footnote 74 on p. 54 ante.
58. Substituted for "does not exceed twenty thousand rupees" by the Finance Act, 1979, w.e.f. 1-4-1980. specified words were substituted for "fifteen thousand" by the Finance Act, 1969, w.e.f. 1-4-1970.
58a. Words "chargeable under section 18" omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
59. "section 80H or" omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
60. Inserted by the Direct Taxes (Amendment; Act, 1974, w.e.f. 1-4-1974.
61. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
62. Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.
63. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.
64. Inserted by the Finance (No 2) Act, 1980, w.e.f. 1-4-1981.
65. "or section 80JJ", which was earlier inserted by the Finance Act, 1975, w.e.f. 1-4-1976, omitted by the Finance Act, 1985, w.e.f. 1-4-1986.
66. "or section 80JJA". winch expression was earlier inserted by die Finance Act, 1979, w.e.f. 1-4-1980, omitted by the Finance Act, 19S3. w.e.f. 1-4-1984.
67. "section 80H," omitted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
68. Inserted by the Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1974.
69. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978.
70. Inserted by the Finance Act, 1982, w.e.f. 1-4-1983.
71. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983.
72. Inserted by the Finance Act, 1981, w.e.f. 1-4-1981.
73. Substituted for "section 80J and section 80JJ" by the Finance Act, 1985, w.e.f. 1-4-1986. Earlier, "section 80J and section 80JJ" was substituted for "section 80J, section 80JJ and section 80JJA" by the Finance Act, 1983, w.e.f. 1-4-1984, "section 80J, section 80JJ and section 80JJA" substituted for "section 80J and section 80JJ" by the Finance Act, 1979, w.e.f. 1-4-1980 and "sections 80J and 80JJ" substituted for "and section 80J" by the Finance Act, 1975, w.e.f. 1-4-1976.
74. Sub-section (4) omitted by the Finance Act, 1969, w.e.f. 1-4-1970.
[AS AMENDED BY THE FINANCE ACT, 1988]