Income Tax Slabs/ Rates for Co-operative Societies (AY 2022-23)

The income tax slabs and rates applicable to cooperative societies in respect of AY 2022-23, as per the Finance Act of 2022, are as follows:

Normal Tax Rates Applicable to Co-operative Societies:

In addition, the surcharge, Health & Education Cess, and Alternate Minimum Tax are applicable as follows:

Surcharge

In cases where the total income of a cooperative society exceeds Rs. 1 crore, the surcharge of 12% (7% from AY 2023-24) of the amount of income tax shall be applicable, subject to provisions relating to marginal relief, if any.

Higher Education Cess (HEC)

The aggregate amount of income tax and surcharge shall be subject to HEC at 4% to all cooperative societies.

Alternate Minimum Tax (AMT)

The alternate minimum tax (AMT) shall be applicable u/s 115JC at 18.5%* of adjusted total income (ATI) + surcharge + HEC in case the cooperative society has claimed deductions u/s 80H to 80RRB (except 80P), 35AD, and 10AA. However, in respect of units of a cooperative society located in the IFSC deriving income solely from convertible foreign exchange (CFE), AMT can be paid at the concessional rate of 9% (instead of 18.5%) + surcharge + HEC.

* 15% from AY 2023-24

Special Tax Rates Applicable to Co-operative Societies:

From AY 2021–22, resident cooperative societies can opt for the Special Tax Rate System (i.e., a lower flat tax rate of 22%) u/s 115BAD of the Income Tax Act, 1961 (as inserted by FA 2020). Further, a surcharge of 10% and HEC at 4% are payable. Provisions of AMT are not applicable to cases under the concessional tax regime available u/s 115BAC or 115BAD. Also, the concessional tax regime is subject to certain conditions:

i) Calculation of total income without any deductions, exemptions, or Section 115BAD(2) incentives;

ii) There is no deadline for choosing the special/lower/flat rate tax option under Section 115BAD, but it must be done according to the rules on or before the ITR filing deadline under Section 139(1) for the first time. Once this choice has been made, it will apply to all future assessment years;

iii) Once an assessee has opted for a special, lower, or flat tax rate u/s 115BAD, he or she can’t revert back to the normal tax slabs system for the same or any other previous year;

iv) No deduction for carried-forward losses and depreciation on specified items; and

v) If the assessee doesn’t meet any of the above conditions when figuring out their income for a previous year, the option is no longer valid, and the rest of the Act’s rules apply as if the option hadn’t been used for that previous year’s assessment year and any subsequent assessment years.

Related Posts: >> Finance Act, 2022 <<