Income Tax Slabs/ Rates for Co-operative Societies (FY 2020-21/ AY 2021-22)

Income Tax Slabs/ Rates applicable for Co-operative Societies in respect of FY 2020-21/ AY 2021-22, as per Finance Act, 2020, are as under:

Normal Tax Rates Applicable to Co-operative Societies:

In addition, Surcharge and Health & Education Cess (HEC), are applicable as under:

i) Surcharge: At the rate of 12% of the amount of income tax, in the cases where total income of the Co-operative Society exceeds Rs. 1 crore, subject to provisions relating to marginal relief; and

ii) HEC: At the rate of 4% of the aggregate amount of the Income Tax and Surcharge, in all cases.

Alternate Minimum Tax (AMT) at the rate of 18.5% of Adjusted Total Income (ATI) + Surcharge + HEC, shall be applicable u/s 115JC, in case the Co-operative Society has claimed deduction u/s 80H to 80RRB (except 80P), 35AD and 10AA. However, units located in IFSC deriving income solely from Convertible Foreign Exchange (CFE) can pay AMT at the concessional rate of 9% (instead of 18.5%) + Surcharge + HEC.

Special Tax Rates Applicable to Co-operative Societies:

From AY 2021-22, Resident Co-operative Societies can opt for Special Tax Rate System (i.e. lower/ flat tax rate of 22%) u/s 115BAD of the Income Tax Act, 1961 (as inserted by FA 2020), subject to certain conditions:

i) total income computation without claiming any of the deductions, exemptions or incentives specified in Section 115BAD(2). [as listed below]

ii) although there is no time limit to opt for special/ lower/ flat rate tax option u/s 115BAD, yet the same is to be done as per the prescribed procedure on or before the ITR filing due date u/s 139(1) for the first time and such option once exercised shall apply to subsequent assessment years.

iii) once opted for special/ lower/ flat tax rate u/s 115BAD, assessee can’t revert back to Normal Tax Rate Slabs system for the same or other previous year.

iv) No set off of brought forward losses and depreciation in respect of specified items.

v) In case the assessee fails to satisfy any of the above conditions in computation of income for any previous year, the option shall become invalid and the other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.

Further, surcharge @10% and HEC @4% are payable. Provisions of AMT not applicable to cases under concessional tax regime available u/s 115BAC or 115BAD.

Text of Section 115BAD(2)…

(2) For the purposes of sub-section (1), the total income of the co-operative society shall be computed,-

(i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA;

(ii) without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and

(iii) by claiming the depreciation, if any, under section 32, other than clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.

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