⁴⁴[Deduction in respect of income of co-operative societies.

⁴⁵80P. (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 facilities⁴⁶ to its members⁴⁶, or

     (ii)  a cottage industry⁴⁷, or

⁴⁸[(iii) the marketing⁴⁷ 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, ⁴⁹[or]

⁴⁹[(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 activities⁵⁰ :

                  ⁵¹[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;]

        ⁵²[(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 company⁵³ 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 activities⁵⁴ 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 attributable⁵⁵ to such activities as ⁵⁶[does not exceed,

       (i)  where such co-operative society is a consumers co-operative society, ⁵⁷[one hundred] thousand rupees; and

     (ii)  in any other case, ⁵⁸[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 warehouses⁵⁹ for storage, processing or facilitating the marketing of commodities⁵⁹, 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 ⁶⁰[***] 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 ⁶¹[***] ⁶²[section 80HH] ⁶³[or section 80HHA] ⁶⁴[or section 80HHB] ⁶⁵[or section 80HHC] ⁶⁶[or section 80HHD] ⁶⁷[or section 80-I] ⁶⁸[or section 80-IA] or section ⁶⁹80J ⁷⁰[***] ⁷¹[***], 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 ⁷²[***] ⁷³[section 80HH,] ⁷⁴[section 80HHA,] ⁷⁵[section 80HHB,] ⁷⁶[section 80HHC,] ⁷⁷[section 80HHD,] ⁷⁸[section 80-I,] ⁷⁹[section 80-IA,] ⁸⁰[⁸¹[section 80J⁸² and section 80JJ]].]

⁸³[(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.]