Deduction in respect of income of co-operative societies
Section 80P of the Income-tax Act, 1961 deals with deduction in respect of income of co-operative societies. 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 o The Act came into force on 01 Apr 1962. Repealed by the Income-tax Act, 2025 with effect from 1 April 2026, but conduct before that date is still charged, tried and appealed under it.
(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 co-operative 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 agricultural produce grown by 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, or (vi) the collective disposal of the labour of its members, or (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities :
Provided that in the case of a co-operative society falling under sub-clause (vi), or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely:—
(1) the individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;
(2) the co-operative credit societies which provide financial assistance to the society;
(3) the State Government;
(b) in the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to—
(i) a federal co-operative society, being a society engaged in the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be; or (ii) the Government or a local authority; or (iii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business;
(c) in the case of a co-operative 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,—
(i) where such co-operative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees.
Explanation.—In this clause, "consumers' co-operative society" means a society for the benefit of the consumers;
(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 co-operative society, not being a housing society or an urban consumers' society or 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 or any income from house property chargeable under section 22.
Explanation.—For the purposes of this section, an "urban consumers' co-operative society" means a society for the benefit of the consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.
(3) In a case where the assessee is entitled also to the deduction under section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80J, the deduction under sub-section (1) of this section, in relation to the sums specified in clause (a) or clause (b) or clause (c) of sub-section (2), shall be allowed with reference to the income, if any, as referred to in those clauses included in the gross total income as reduced by the deductions under section 80HH, section 80HHA, section 80HHB, section 80HHC, section 80HHD, section 80-I, section 80-IA, section 80J and section 80JJ.
(4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co- operative agricultural and rural development bank.
Explanation.—For the purposes of this sub-section,—
(a) "co-operative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949);
(b) "primary co-operative agricultural and rural development bank" means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities.
Deduction in respect of certain income of Producer Companies.
Section 80P, The Income-tax Act, 1961 (Act 43 of 1961).
Now in the Income-tax Act
INCOME-TAX-ACT-2025 149 Deduction in respect of income of co-operative societies Official correspondence
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
- s. 22 Income from house property
- s. 80 Submission of return for losses
- s. 80HH Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas
- s. 80HHA Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas
- s. 80HHB Deduction in respect of profits and gains from projects outside India
- s. 80HHC Deduction in respect of profits retained for export business
- s. 80HHD Deduction in respect of earnings in convertible foreign exchange
Referred to by 20
- Finance Act s. 10 Amendment of section 80P
- Finance Act s. 22 Amendment of section 80P
- Finance Act s. 18 Amendment of section 80P
- Finance Act s. 14 Amendment of section 80P
- Finance Act s. 30 Amendment of section 80P
- Finance Act s. 27 Amendment of section 80P
- Finance Act s. 35 Insertion of new section 80Q
- Finance Act s. 18 Amendment of section 80P
- Finance Act s. 37 Amendment of section 80P
- Finance Act s. 19 Amendment of section 80P
- Finance Act s. 30 Insertion of new section 80PA
- s. 36 Other deductions
and 8 more
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Kerala State Co-operative Agricultural and Rural Development Bank Ltd. v. The Assessing Officer, Trivandrum
Court's Decision & Legal Precedent
An apex State agricultural and rural development co-operative society is not a 'co-operative bank' under BR Act s.5(b) read with s.56 merely because it is an apex society; absent banking licence / state co-operative bank status attracting s.80P(4), it remains entitled to deduction under s.80P.
On this section: Teaches the BR Act / NABARD gate for the s.80P(4) co-operative-bank exclusion as applied to apex agri-rural development banks.
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The Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax, Calicut
Court's Decision & Legal Precedent
Primary agricultural credit societies registered under State co-operative law remain entitled to s.80P(2)(a)(i) deduction for providing credit facilities to members even if credit is not exclusively agricultural; s.80P is a benevolent provision to be read liberally, and s.80P(4)'s co-operative-bank exclusion does not strip PACS merely because they also extend non-agricultural credit to members.
On this section: Teaches that PACS classification + member credit facilities suffice for s.80P(2)(a)(i); non-agricultural member credit does not by itself attract the s.80P(4) bank exclusion.
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The Poonjar Service Co-operative Bank Ltd. v. The Principal Commissioner of Income Tax
Court's Decision & Legal Precedent
Primary agricultural credit societies registered under State co-operative law remain entitled to s.80P(2)(a)(i) deduction for providing credit facilities to members even if credit is not exclusively agricultural; s.80P is a benevolent provision to be read liberally, and s.80P(4)'s co-operative-bank exclusion does not strip PACS merely because they also extend non-agricultural credit to members.
On this section: Teaches that PACS classification + member credit facilities suffice for s.80P(2)(a)(i); non-agricultural member credit does not by itself attract the s.80P(4) bank exclusion.
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The Kidangoor Service Cooperative Bank Ltd. v. The Principal Commissioner of Income Tax
Court's Decision & Legal Precedent
Primary agricultural credit societies registered under State co-operative law remain entitled to s.80P(2)(a)(i) deduction for providing credit facilities to members even if credit is not exclusively agricultural; s.80P is a benevolent provision to be read liberally, and s.80P(4)'s co-operative-bank exclusion does not strip PACS merely because they also extend non-agricultural credit to members.
On this section: Teaches that PACS classification + member credit facilities suffice for s.80P(2)(a)(i); non-agricultural member credit does not by itself attract the s.80P(4) bank exclusion.
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Kerala State Co-operative Agricultural and Rural Development Bank Ltd. Kscardb vs The Assessing Officer, Trivandrum
Court's Decision & Legal Precedent
A cooperative society which is not a state cooperative bank, central cooperative bank, or primary cooperative bank as defined under NABARD Act, 1981 and which does not conduct banking business as defined in Section 5(b) of the Banking Regulation Act (i.e., does not accept deposits from the public and does not hold an RBI license) is not a co-operative bank within the meaning of Section 80P(4) of the Income Tax Act, 1961, and is therefore entitled to claim deduction of the whole of its profits and gains of business attributable to providing credit facilities to its members under Section 80P(2)(a)(i) of the Act. The determination of whether an entity is a co-operative bank depends on: (1) whether it has been declared as a state/central cooperative bank by the State Government under NABARD Act, 1981; (2) whether it conducts banking business as defined (accepting deposits from public); and (3) whether it holds an RBI license under Section 22 of the Banking Regulation Act, 1949.
On this section: Section 80P provides deduction for co-operative societies engaged in specified activities. Sub-section (4) excludes co-operative banks except primary agricultural credit societies and primary cooperative agricultural and rural development banks. The court interpreted this as a proviso excluding only those entities that require RBI licensing to conduct banking business.
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Maxopp Investment Ltd. . Director vs Commr. of I. T New Delhi
Court's Decision & Legal Precedent
The dominant purpose or intention behind investment in shares is not relevant in determining applicability of Section 14A. Where dividend income is earned on shares, whether held as investment for acquiring controlling interest or as stock-in-trade, the principle of apportionment of expenditure between taxable and non-taxable income applies under Section 14A. Expenditure incurred in relation to earning tax-exempt dividend income must be disallowed proportionately. However, where shares are held as stock-in-trade and dividend is earned incidentally, the apportionment must be done based on actual facts and circumstances. The Assessing Officer must record satisfaction before applying apportionment under Section 14A(2) read with Rule 8D, and must examine the nature of loan taken for purchasing shares. Rule 8D is prospective in nature and applies only to assessment years from 2007-08 onwards.
On this section: Cited in context of CBDT Circular regarding deductions available to banking institutions
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… These appeals have been filed by co-operative societies who have been registered as 'primary agricultural credit societies', together with one 'multi-State co-operative society', and raise important questions as to deductions that can be claimed under section 80P(2)(a) (i) of the Income-Tax Act, 1961 (" IT Act "); and in particular, whether these assessees are entitled to such deductions after the introduction of section 80P(4) of the IT Act by section 19 of the Finance Act, 2006 (21 of 2006) with effect from 01.04.2007. It may be stated at the outset that all these …
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… These appeals have been filed by co-operative societies who have been registered as 'primary agricultural credit societies', together with one 'multi-State co-operative society', and raise important questions as to deductions that can be claimed under section 80P(2)(a) (i) of the Income-Tax Act, 1961 (" IT Act "); and in particular, whether these assessees are entitled to such deductions after the introduction of section 80P(4) of the IT Act by section 19 of the Finance Act, 2006 (21 of 2006) with effect from 01.04.2007. It may be stated at the outset that all these …
Questions about Section 80P
What have the courts held on Section 80P of the Income-tax Act?
Kerala State Co-operative Agricultural and Rural Development Bank Ltd. v. The Assessing Officer, Trivandrum (14 Sep 2023) is the leading judgment on this section among those set out below: Teaches the BR Act / NABARD gate for the s.80P(4) co-operative-bank exclusion as applied to apex agri-rural development banks. Another 5 judgments on this section are set out below, all of them from the Supreme Court. They run from 2018 to 2023.
How do I find court cases under Section 80P of the Income-tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Income Tax Act 80P, section 80P Income Tax Act, section 80P of the Income-tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 6 reported judgments on this section are set out on this page, beginning with Kerala State Co-operative Agricultural and Rural Development Bank Ltd. v. The Assessing Officer, Trivandrum (14 Sep 2023).
What should I read with Section 80P of the Income-tax Act, and has it changed?
Its own text turns on section 22 (Income from house property), section 80 (Submission of return for losses), section 80HH (Deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas), section 80HHA (Deduction in respect of profits and gains from newly established small-scale industrial undertakings in certain areas), and on 3 further provisions, so none of them can safely be read on its own. 20 other provisions in this corpus refer back to it. For anything done on or after 1 April 2026 the provision to read is Income-tax Act, 2025, section 149 (Deduction in respect of income of co-operative societies), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 80P of the Income-tax Act come into force?
Section 80P of the Income-tax Act, cited as Income Tax Act 80P, came into force on 01 Apr 1962, having been enacted on 13 Sep 1961. It is no longer in force.
Other sections of this Act
- 10. Incomes not included in total income30885 words
- 2. Definitions11419 words
- 80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc7148 words
- 80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings5474 words
- 155. Other amendments5451 words
- 139. Return of income5400 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by the Income Tax Department, as amended by the Finance Act, 2026. India Code holds no record of this Act in any form. This page is not a substitute for legal advice.