Section 80P(2)(a)(i) of the Income Tax Act

Income-tax Act, 2025: s.149

Section 80P(2)(a)(i) falls under section 80P of the Income-tax Act, 1961, which corresponds to section 149 (Deduction in respect of income of co-operative societies) of the Income-tax Act, 2025.

Read section 149 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 80P(2)(a)(i) is Totgars Co-operative Sale Society Ltd. v. ITO (322 ITR 283), cited in 1,283 of the 2,347 judgments on BharatTax that turn on this section.

Leading authorities on Section 80P(2)(a)(i)

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

Pr. CIT v. Totagars
395 ITR 611 · 2017 · High Court
1,074
citing judgments

Interest income earned by a cooperative society from surplus deposits or investments held with a cooperative bank is not eligible for deduction under Section 80P(2)(d) of the Act.

Mavilayi Service Co-operative Bank Ltd. v. CIT
431 ITR 1 · 2021 · Supreme Court
999
citing judgments

Section 80P(4) serves as a proviso to Section 80P(1) and (2), excluding only cooperative banks that are cooperative societies and possess an RBI license for banking business. Its purpose is to exclude cooperative banks operating like commercial banks that lend money to the public.

State Bank Of India v. CIT
389 ITR 578 · 2016 · High Court
817
citing judgments

Income arising from a cooperative society's surplus funds invested in short-term deposits and securities is not attributable to the society's core activities and, therefore, is not eligible for exemption under Section 80P(2)(a)(i) of the Income-tax Act.

Pr. Commissioner of Income Tax and Anr. v. Totagars Cooperative Sale Society
392 ITR 74 · 2017 · High Court
762
citing judgments

Interest income earned by a cooperative society from its investments or surplus deposits with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

Subramanian and Anr. v. Siemens India Ltd. and Anr.
156 ITR 11 · 1985 · High Court
541
citing judgments

When there is a conflict between the decisions of non-jurisdictional High Courts, the view that favors the assessee should be preferred.

Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO
230 Taxmann 309 · 2015 · High Court
527
citing judgments

A cooperative society is eligible for deduction under Section 80P(2)(a)(i) if it is engaged in cooperative activities. It also clarifies the allowability of deduction under Section 80P(2)(d) for interest income received from investments made in cooperative banks, after duly considering the Supreme Court's decision in Totgars Co-operative Sale Society Ltd.

Citizen Co-operative Society Ltd. v. ACIT
397 ITR 1 · 2017 · Supreme Court
499
citing judgments

A co-operative credit society engaged in banking business with the general public, accepting deposits from non-members and advancing loans to non-members, is treated as a co-operative bank. Such a society falls under the exclusionary clause of Section 80P(4) and is not eligible for deduction under Section 80P(2)(a)(i).

Totgar's Co-operative Sale Society Ltd. v. ITO
188 Taxmann 282 · 2010 · Supreme Court
486
citing judgments

Interest income earned by a co-operative society from investments, particularly with co-operative banks, is not eligible for deduction under Section 80P as it is not attributable to the core business activities of the society and constitutes "other income", not "profits and gains of business".

CIT v. Andhra Pradesh State
200 Taxmann 220 · 2011 · High Court
348
citing judgments

Interest earned by a Co-operative Society from investing fixed deposits in banks is entitled to a deduction under Section 80P(2)(a)(i) of the Income-tax Act.

Judgments on Section 80P(2)(a)(i)

Lenyadri Sahakari Pathpedhi Maryadit, Mumbai vs. ITO, Ward-27(2)(1), Mumbai, Vashi

ITA 1692/MUM/2026[2018-19]Status: DisposedITAT Mumbai19 Aug 2026AY 2018-19

Bench: Shri Pawan Singh & Shri Girish Agrawal(Physicalhearing) Lenyadri Sahakari Pathpedhi Ito, Ward – 27(2)(1), Mumbai Maryadit, Shop No. 4, Vs 3Rd Floor, Tower No. 6, Vashi M.S. Khanna Apartment. Nss Road, Railway Station Commercial Asalfa Village, Ghatkopar(W), Complex, Vashi, Mumbai - 400084. Navi Mumbai – 400703. [Pan: Aabfl9862A] Appellant / Assessee Respondent / Revenue Assessee By Shri Subodh Ratnaparkhi, Ca Revenue By Shri Surendra Mohan,Sr. Dr. Date Of Institution 17.02.2026 Date Of Hearing 21.05.2026 Date Of Pronouncement 19.08.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh; 1. This Appeal By Assessee Is Directed Against The Order Of Ld. Cit(A)/ Nfacdated 30.12.2025 For Assessment Year (Ay) 2018-19. The Assessee Has Raised Following Grounds Of Appeal: “1. The Hon’Ble Cit(A) Erred In Upholding Additions To The Extent Of Rs.53,38,676/- (Rs.22,40,531/- Plus Rs.2,69,320/- Plus Rs.28,28,825/-) On Various Grounds While At The Same Time Holding The Appellant To Be A Co- Operative Credit Society Engaged In Carrying On Banking Business & Entitled To Deduction U/S 80(2)(A)(I) Of The I. T. Act, 1961, Not Appreciating That The Addition Amount Would Also Be Eligible For Deduction U/S 80(2)(A)(I) Of The I. T. Act, 1961 & Should Be Deleted. 2. The Hon’Ble Cit(A) Erred In Upholding The Addition Of Rs.22,40,531/- Made By Disallowing The Commission Paid To Daily Deposit Agents, Not Appreciating That The Concerned Expenditure Was Genuine Business Expenditure Supported By Adequate Evidence & Therefore The Addition Of Rs.22,40,531/- On The Above Count Was Not Warranted By Facts & In Law & Is Required To Be Deleted. Lenyadri Sahakari Pathpedhi Maryadit

Section 145(3)Section 254(1)Section 80(2)(a)Section 80P(2)(a)