My client is co-operative society doing banking business and giving loan only to its members apart from this the society has income from rent. my question is whether this rental income is taxable or will get the deduction u.s 80p. please clarify
RENTAL INCOME OF A BANKING SOCIETY IS TAXABLE?
Dear Sir,
Hope you are doing well !!
A co-operative society earning income from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities is eligible for 100% deduction u/s 80P .
The business of banking or providing credit facilities to its members- Quantum of deduction u/s 80P-100% of profits and gains attributable to these activities.
Yes, if the society is covered under the definition of Co-operative society for the purpose of Section 80P.
Max. Rs. 50,000 deduction is available.
Hi
It Falls under "Any other activities of Cooperative society" so max Rs 50000 will be available as deduction.
Hope it helps
What type of rental income is this?
As per section 80P rental income with regard to godowns used for storage of commodities is only allowed as deduction nothing else.
So if the rent income is from such godowns then only it will be allowed as deduction otherwise it will be taxable.
This deduction will only be available if it's a primary agricultural credit society or a primary co-operative agricultural and rural development bank.
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Thank you
Hi
Such rental income received by the cooperative society shall be a taxable income. No deduction under section 80P shall be available in respect of such income.
I assume that being primarily in a banking business, earning of such rental income is not one of its businesses.
Hi,
Yes, rental income of a banking society is taxable.
You can not claim the deduction u/s 80P.
