Income tax division points clarification on notices for Section 80P deductions

After a number of revenue taxpayers acquired notices for wrongly claiming revenue tax deductions below Section 80 P, the Income Tax Department (ITD) clarified that they had been despatched to them by mistake. The ITD added that “an email communication regarding this will be sent to you shortly”.

“Defective return errors coming in partnership corporations. Section 80P talked about isn’t relevant to corporations. A futile train of responding to such system-generated queries needs to be carried out.@IncomeTaxIndia,” this question was raised by taxpayer, chartered accountant Nirav Choksi on X (previously Twitter),

In response, the Income Tax Department tweeted, “Intimation u/s 143(1) of Income-tax Act, 1961 with the error description: “In Schedule 80P, deduction u/s 80P(2)(e) can’t be claimed on revenue apart from rental revenue” has been inadvertently sent. An email communication regarding this will be sent to you shortly. The inconvenience caused is regretted.”

Deduction in respect of revenue of co-operative societies Section 80P 

One of the deductions out there below the Income Tax Act is deductions with respect to the revenue or beneficial properties of cooperative societies, which is supplied below Section 80P. The deduction below Section 80P is accessible to people, Hindu Undivided Families (HUFs), corporations, and corporations.

What does the Income Tax Act say about Section 80 P

(1) Where, within the case of an assessee being a co-operative society, the gross whole revenue consists of any revenue referred to in sub-section (2), there shall be deducted, in accordance with and topic to the provisions of this part, the sums laid out in sub-section (2), in computing the entire revenue of the assessee.

(2) The sums referred to in sub-section (1) shall be the next, particularly :—

(a) In the case of a cooperative society engaged in—

(i) carrying on the enterprise of banking or offering credit score amenities to its members, or

(ii) a cottage trade, or

(iii) the advertising and marketing of the agricultural produce of its members, or

(iv) the acquisition of agricultural implements, seeds, livestock, or different articles supposed for agriculture for the aim of supplying them to its members, or

(v) the processing, with out assistance from energy, of the agricultural produce of its members, the entire of the quantity of income and beneficial properties of enterprise attributable to any a number of of such actions ;

(b) In the case of a co-operative society, being a major society engaged in supplying milk raised by its members to a federal milk co-operative society, the entire of the quantity of income and beneficial properties of such enterprise;

(c) In the case of a cooperative society engaged in actions apart from these laid out in clause (a) or clause(b) [either independently of, or in addition to, all or any of the activities so specified], a lot of its income and beneficial properties attributable to such actions as doesn’t exceed 1[fifteen thousand rupees];

(d) in respect of any revenue by means of curiosity or dividends derived by the co-operative society from its investments with every other co-operative society, the entire of such revenue;

(e) in respect of any revenue derived by the co-operative society from the letting of godowns or warehouses for storage, processing, or facilitating the advertising and marketing of commodities, the entire of such revenue;

(f) In the case of a cooperative society, not being a housing society an city shoppers’ society, a society carrying on transport enterprise, or a society engaged within the efficiency of any manufacturing operations with assistance from energy, the place the gross whole revenue doesn’t exceed twenty thousand rupees, the quantity of any revenue by means of curiosity on securities chargeable below part 18 or any revenue from home property chargeable below part 22.

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Updated: 05 Sep 2023, 02:03 PM IST