Section 80P of the Income Tax Act

Income-tax Act, 2025: s.149

Section 80P of the Income-tax Act, 1961 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 is Totgars Co-operative Sale Society Ltd. v. ITO (322 ITR 283), cited in 1,283 of the 5,069 judgments on BharatTax that turn on this section.

Leading authorities on Section 80P

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.

Co-operative Bank Ltd. v. CIT
384 ITR 490 · 2016 · High Court
631
citing judgments

Co-operative banks are not fundamentally different from co-operative societies, entitling them to claim deductions under Section 80P of the Income Tax Act, 1961, including for interest income treated as business income.

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

The Mysore Co-Op. Housing Society Ltd., Mumbai vs. Pr. CIT-27, Navi Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 730/MUM/2021[2015-16]Status: DisposedITAT Mumbai10 Aug 2022AY 2015-16

Bench: Shri Pavan Kumar Gadale & Shri Amarjit Singhthe Mysore Co-Op Vs. Pr.Cit-27, Housing Society Ltd, Room No -401, 4 Th Gateno2, Mysore Colony, Floor, Tower-6, Vashi Near Rcf Factory, Railway Station Anik,Off Majul Road, Commercial Complex, Chembur, Vashi,Navi Mumbai- Mumbai-400074 400073. Pan/Gir No. : Aacft7837N Appellant .. Respondent Appellant By : Mr.M.Subramanian.& Ms.Varsha Nanwani.Ar Respondent By : Mr. Ajay. Cit Dr Date Of Hearing 08.08.2022 Date Of Pronouncement 10.08.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed An Appeal Against The Order Of The Principal Commissioner Of Income Tax (Pr.Cit), Mumbai Passed U/S 263 Of The Act Dated 17.03.2021. Mysore Co-Op Housing Society Ltd. Mumbai. 2. The Brief Facts Of The Case Are That The Assesse Is A Cooperative Housing Society & Derives Income House Property & Interest From Bank & Provides Credit Facilities To Its Members. The Assessee Has Filed The Return Of Income For The A.Y 2015-16 Electronically On 26.10.2015 Disclosing A Total Income Of Rs.43,08,320/- After Claiming Deduction U/S 80P(2)(D) Of The Act Of Rs.85,80,391/-In Respect Of Interest Income Received On Deposits With Co-Op Banks. The Return Of Income Was Processed U/S 143(1) Of The Act. Subsequently The Case Was Selected For Limited Scrutiny Through Cass For Verification Of (I)Income From Heads Of Income Other Than Business/Profession Mismatch(Ii)Sales Turnover Mismatch & (Iii) Deduction Under Chapter Vi-A. The Assessing Officer (A.O.) Issued Notice U/S 143(2) & 142(1) Of The Act Along With The Questionnaire. In Compliance, The Ld.Ar Of The Assessee Appeared From Time To Time, Produced The Books Of Accounts & Submitted The Relevant Details & Documents & The Case Was Discussed.

For Appellant: Mr.M.Subramanian.&For Respondent: Mr. Ajay. CIT DR
Section 143(1)Section 143(2)Section 143(3)Section 263Section 80P(2)(d)