• Notification Date: 17-11-2023
• Notification No: N/A

Interest Income from Cooperative Bank Qualifies for Deduction as Income Tax: Madras HC

The Madras High Court has held that interest income from a Cooperative bank qualifies for deduction under Section 80P(2)(d) of the Income Tax Act 1961.  

Bench of Justice Krishnan Ramasamy emphasised that a Cooperative bank falls under the definition of a Cooperative society as outlined in the Co-operative Societies Act 1912. 

The Court observed that, "A reading of the above definition would make it clear that 'Co-operative Society' means a Co-operative Society   registered under Co-operative Societies Act, 1912. Thus, a Co-operative Society referred therein is only a co-operative society as defined under the Act, be it a Co-operative Society carrying on banking business or Co-operative Society carrying on the other businesses or a Co-operative bank." 

The court, while addressing petitions from credit societies challenging Income Tax notices, affirmed that a Cooperative bank, engaged in banking or other businesses, is considered a Cooperative society under the Act and is eligible for the specified deduction.