After several income taxpayers received notices for wrongly claiming income tax deductions under Section 80 P, the Income Tax Department (ITD) clarified that they were sent 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 firms. Section 80P mentioned is not applicable to firms. A futile exercise of responding to such system-generated queries has to be done.@IncomeTaxIndia,” this query was raised by taxpayer, chartered accountant Nirav Choksi on X (formerly 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) cannot be claimed on income other than rental income” has been inadvertently sent. An email communication regarding this will be sent to you shortly. The inconvenience caused is regretted.”
Deduction in respect of income of co-operative societies Section 80P
One of the deductions available under the Income Tax Act is deductions with respect to the income or gains of cooperative societies, which is provided under Section 80P. The deduction under Section 80P is available to individuals, Hindu Undivided Families (HUFs), companies, and firms.
What does the Income Tax Act say about Section 80 P
(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 cooperative society engaged in—
(i) carrying on the business of banking or providing credit facilities to its members, or
(ii) a cottage industry, or
(iii) the marketing of the agricultural produce of 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, the whole of the amount of profits and gains of business attributable to any one or more of such activities ;
(b) In the case of a co-operative society, being a primary society engaged in supplying milk raised by its members to a federal milk co-operative society, the whole of the amount of profits and gains of such business;
(c) In the case of a cooperative society engaged in activities 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 attributable to such activities as does not exceed 1[fifteen thousand rupees];
(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 warehouses for storage, processing, or facilitating the marketing of commodities, the whole of such income;
(f) In the case of a cooperative society, not being a housing society an urban consumers’ society, 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 chargeable under section 18 or any income from house property chargeable under section 22.