The Income Tax Provisions, as applicable to Co-Operative Societies are lucidly mentioned herein below
1. Section 40A particularly Sub-Section (3)
If any payment, whether Capital Expense or Revenue Expense, exceeding Rs. 10,000:/is made on one day to one person, then in computing Business Income such Revenue Expense is not allowable and No depreciation is allowable on such Capital Expense . i.e in effect Assessee has to pay to Income Tax @ 30% plus cess for that year and on account of disallowance Tax liability of Current Year and subsequent years @ 30% plus cess of otherwise allowable Depreciation.
Many Societies purchase Inverters & Batteries by paying more than Rs. 10,000/- in cash to the dealer on one day.
Accordingly, please advise all Societies.
2. Section 44AB
In a nutshell mandates Income Tax Audit, if the Turnover in a FY exceeds Rs. 1 Crore, to get Audit Reports in Form 3CA/ 3CB and Certification of Certain Particulars in Form 3CD and to be submitted to the Income Tax Department, online, on or before the 'Specified Due Date' u/s 139(1).
3. Section 139
139(1): Specified Due Date for FY 2020-21 is 31.07.2021, where Sales / Turnover / Gross Receipts is less than Rs 1 Crore and 30.09.2021, where Sales/ Turnover /Gross Receipts is more than Rs 1 Crore.
The advantages of filing IT Return u/s139(1) are as follows:
- Assessee can file a Revised Return u/s 139(5), upto 31.03.2022, if there are any errors of omission or commission.
- Assessee can carry forward Loss and set off the same against taxable income of 8 succeeding Assessment Years as per the provisions of Section 72.
- If IT Return filed after specified due date, No Revised Return permitted, No carry forward of Loss allowed, rather required to pay Interest u/s 234 A.
Section 234F: Belated Returns also attract Late Fees ranging from Rs 1,000/- to Rs 10,000/- as per the facts of the case.
4. Section 271B
If any Assessee required to get accounts audited u/s 44AB fails to get the accounts audited and or fails to submit to the IT Department online by 30.09.2021, then the Assessee shall have to pay a PENALTY of 0.5% of Turnover, etc. OR Rs 1,50,000/- whichever is lower.
5. Section 80P
In case of a Primary Society supplying Milk raised from its Members to a Federal Society, there shall be deducted WHOLE OF THE AMOUNT OF INCOME from Gross Total Income, i.e. it NEED NOT PAY ANY INCOME TAX.
However, if a Society receives from Non-Members, effects Local Sales, Sample Sales and or derives Income from Rents, Bank Interest on FD/SB Accounts then on such incomes income tax payable.
6. Section 194N
Substituted w.e.f 01.07.2020:
- For Filers of Income Tax Returns of last 3 years that too within Due Date Specified u/s 139(1),
- No Tax Deduction at Source upto cash withdrawals of Rs one crore.
- In other cases where returns not filed for 3 years, filed but not complying Section 139(1), then deduction for cash withdrawals exceed Rs 20 lakhs.
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