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80-P Income Tax
Updated on : Aug. 27, 2022 - 2 p.m. 17 min read.
Section 80P income tax offers a tax deduction for co-operative societies which are engaged in specified agricultural activities. This article discusses the quantum of deduction available to a specified cooperative society that is engaged in providing the activities mentioned under Section 80P of the Income Tax Act.
Eligibility criteria:
Section 80P deduction is available only to primary agricultural credit societies or primary cooperative agricultural and rural development banks. The deduction is available when the income earned by the cooperative society from the specified activities is included in the gross total income of the assessee.
Deduction:
100% deduction is available under Section 80P towards the Profit and Gains attributable to the following activities: Deduction in respect of Income of Co-operative Societies In case of all co-operative societies, except co-operative banks (excluding a primary agricultural credit society or a primary co-operative agricultural and rural development bank), a full deduction is allowable in respect of the following income.
Activities and amount eligible for deduction:
Exclusions:
The Finance Act, of 2006 introduced specific exclusions to the applicability of the benefit of deduction under Section 80P.
Section 80P is made not applicable to any cooperative bank (including Regional Rural Banks) other than a primary agricultural credit society (as defined in the Banking Regulation Act) or a primary cooperative agricultural and rural development bank (a society having its area of operation confined to taluk and the principal object of which is to provide long-term credit for agricultural and rural development activities).
The benefit of the deduction is withdrawn with the intention to treat cooperative banks on par with commercial banks that do not enjoy any such tax benefit.
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