05 March 2012
My friends are the managing committee members in co-op credit society registered under Maharashtra Co-op Societies Act,1961. Their society is having following sources of income. 1) Interest recd from members on loans given to them 2) Saving Bank interest received on SB account with Bank. 3) Interest received on FDR's with Co-op Bank. 4) Dividend recd on shares of Co-op Bank. Their net income arrives at Rs.1,10,000/-. Is income tax applicable on their income ?
07 March 2012
As per sect. 5A of Banking Regulation Act 1949, co op credit society whose principal business is of a primary credit society doing the transaction of banking business and When its paid up capital and reserves attain the level of Rs.1 lakh, a primary credit society automatically becomes a primary co-operative bank. Once the urban Co operative credit society and Pat-Pedhis are classified as Bank, by virtue of Section 80P(4) read with section 2(24)(viia) both of I. T. Act, 1961, they are not eligible for benefit provided under section 80P of the Income Tax Act,1961, from Assessment Year 2007-08. Subject to above, other provisions of I Tax Act will be applicable. As per my view income Tax will be applicable.
CAclubindia
