• Taxation of Cooperative Housing Society

Assessee is a Cooperative Housing Society. For AY 2016-17 the assessee has claimed full deduction of Interest on FD with Cooperative Banks u/s 80(P)(2)(d). The Fixed Deposits are with New India Cooperative Bank. The AO has proposed to disallow the same in view of amendment in Finance Act 2006. Kindly advise the correct legal position for AY 2016-17 and AY 2018-19.
Asked 5 months ago in Income Tax from Mumbai, Maharashtra

According to amendment by finance act 2006, normal co operative bank have been removed from the section 80P, so now in relation to co operative bank it only includes primary agricultural society and other name mentioned in sub section 4 of 80P.

Therefore assessing officer is correct in collecting tax on such income as such income won't be exempt under section 80P.

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Naman Maloo
CA, Jaipur
1020 Answers
6 Consultations

5.0 on 5.0


To avail deduction of interest, the only condition is investment in other cooperative society and it is available to all cooperative societies irrespective of nature of activities carried out by them. Position is same in A.Y. 2018-19.


Vivek Kumar Arora
CA, Delhi
2100 Answers
89 Consultations

5.0 on 5.0


Hope you are doing well !

Yes, AO is correct.

The same would be disallowed.

Thanks & Regards,

Payal Chhajed

Payal Chhajed
CA, Mumbai
1678 Answers
11 Consultations

5.0 on 5.0


The interest earned from investments made by a cooperayive society with any other co-operative society, is entitled to deduction of the whole of such income under section 80P(2)(d) of the Act. However, interest earned from investments made in any bank, not being a co-operative society, is not deductible under section 80P(2)(d) of the Act.

If the bank to n which you have deposited the money is registered as cooperative society than, you are eligible for deduction

Lakshita Bhandari
CA, Mumbai
2663 Answers
105 Consultations

5.0 on 5.0


The provisions of Section 80P(2)(d) of the Act provide deduction in respect of income by way of interest or dividend on investments made with other Cooperative society.

I believe that New India cooperative bank is not covered in it.

So, it won't be allowed as a deduction.

Karishma Chhajer
CA, Jodhpur
858 Answers
4 Consultations

5.0 on 5.0

The stance taken by the AO is correct. The same shall be diaallowed

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

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