Section 115BAD was introduced to provide the benefit of a lower tax rate to Resident Cooperative Societies. It is applicable for any previous year relevant to the assessment year beginning on or after the 1st day of April 2021. It allows them to pay tax at 22%. But, there are certain conditions to be fulfilled in order to avail the benefit u/s 115BAD.
Conditions for availing the benefit of Section 115BAD
The conditions are as follows-
- The total income of the cooperative society has been computed without claiming a specified deduction, exemption or incentives(the list of the same is given below).
- There is no time limit to exercise option u/s 115BAD for the benefit of a lower tax rate. However, the option to avail of the benefit of section 115BAD must be exercised on or before the due date specified under Section 139(1) for furnishing of the first return of income in the prescribed manner. This option once exercised cannot be withdrawn subsequently.
- The Co-operative Societies shall also not be allowed to set off brought forward losses and depreciation from any earlier assessment years if such losses or depreciation is attributable to the deductions mentioned in the list below.
The various deduction and exemptions which a Co-Operative Society opting for section 115BAD cannot claim are as follows:
|
Section |
Deduction |
|
Section 10AA |
Deduction for units established in Special Economic Zones (SEZ) |
|
Section 32(1)(iia) |
Additional Depreciation |
|
Section 32AD |
Deduction for investment in new plant and machinery in notified backward areas |
|
Section 33AB |
Deduction in respect of tea, coffee or rubber business |
|
Section 33ABA |
Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India |
|
Section 35(1)(ii) |
Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business |
|
Section 35(1)(iia) |
Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business |
|
Section 35(1)(iii) |
Deduction for donation made to the university, college, or other institution for doing research in social science or statistical research |
|
Section 35(2AA) |
Deduction for donation made to National Laboratory or IITs, etc. for doing scientific research which may or may not be related to business |
|
Section 35AD |
Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc. |
|
Section 35CCC |
Deduction for expenditure on the agriculture extension project |
|
Any Provision of Chapter VI-A |
Deduction in respect of certain incomes other than specified under Section 80JJAA |
Withdrawal of Application of Section 115BAD
If the Co-Operative Societies fail to satisfy any of the conditions mentioned above while computing their income in any of the previous years. The option shall become invalid in respect of the assessment year relevant to the previous year and subsequent assessment years and other provisions of the act shall apply as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.
Filing of Form no. 10-IF
The Resident Co-Operative Society exercising the option to apply section 115BAD in computing its income is required to furnish in Form no. 10-IF. Such form shall be furnished electronically using the digital signature or Electronic Verification Code(EVC).
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