Last updated on April 20th, 2022 at 06:21 pm
Taxation of Cooperative Societies
A co-operative society is a society registered under the Co-operative Societies Act, 1912, or any other law in the State which requires the registration of co-operative societies.
A co-operative society will have to obtain
- PAN – Permanent Account Number,
- TAN – Tax Deduction Account Number and/or
- GSTIN – Goods and Services Tax Identification Number (if applicable)
Income tax rates on Co-operative Societies
| Income Slabs |
Tax rate |
Special Rate u/s 115BAD (w.e.f. AY 21-22) |
| Up to Rs. 10,000 |
10% |
22% |
| Rs. 10,000 to Rs. 20,000 |
20% |
|
| Above Rs. 20,000 |
30% |
Note: As per section 115BAD, resident co-operative societies can opt to pay tax at the rate of 22% from AY 2021-22. But the total income will be computed without allowing exemptions or deductions available to co-operative societies.
Surcharge on Co-operative Societies
The surcharge is a tax on tax that applies only if the total taxable income exceeds a certain prescribed limit. It is calculated on tax payable and not total income. The rate of the surcharge is determined based on total income but the calculation of the surcharge is done based on tax payable.
The surcharge will be applicable only if the total income exceeds Rs. 1 Crore.
- If the total income is up to Rs. 1 Crore there will be no surcharge.
- If the total income exceeds Rs 1 Crore then the surcharge will be 12% (10% if special tax rates) on the applicable income tax.
Note: Surcharge will be subject to marginal relief.
Marginal Relief on Co-operative Societies
The surcharge levied is subject to marginal relief to ensure the payable amount does not exceed the income which is in excess of the threshold
So, the maximum increase in tax payable due to surcharge will be lower from the following
- Income above Rs. 1 Crore.
- Total amount payable as income-tax and surcharge less the Total amount payable as income-tax on total income of Rs. 1 Crore.
Note: A co-operative society is not eligible to claim a rebate u/s 87A.
Health & Education cess on Co-operative Societies
Health and Education Cess is charged over and above income tax. It is collected by the Government for addressing the educational and healthcare needs of the country.
Health and Education Cess is calculated at the rate of 4% on the amount of income tax and the applicable surcharge.
Advance Tax Installments
Co-operative Societies are also required to pay different installments of the advance tax within the prescribed due dates as it is applicable to other assessees.
|
Tax Liability |
Due Date |
|
15% |
By 15th Jun |
| 45% |
By 15th Sep |
|
75% |
By 15th Dec |
|
100% |
By 15th Mar |
Due Date of Income-tax Return & ITR Form
The due date to file the return of income for co-operative societies under the Income-tax Act is 31st October of the Assessment Year.
The return of income by a co-operative society needs to be furnished in ITR 5 as per the provisions of Section 2(3)(vii) read with section 139.
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