(1) A co-operative society resident in India, for any previous year relevant to the assessment year beginning on or after the 1st day of April 2021, shall, at the option of such person, be computed at the rate of 22%, if the conditions contained in sub-section (2) are satisfied.
(2) Consequence if prescribed conditions are not fulfilled (Proviso to section 115BAD(1)]: Where the person fails to satisfy the conditions contained in sub-section (2) in computing its income in any previous year, the option shall become invalid in respect of the assessment year relevant to that 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.
(3) Prescribed conditions [Section 115BAD(2)]: The total income of the individual or Hindu undivided family shall be computed without claiming following exemptions or deductions or set off of losses:
A. Prescribed exemptions or deductions not available
(i) Exemption for SEZ units under section 10AA
(ii) Additional initial depreciation in respect of plant and machinery under Section 32(1)(iia)
(iii) Investment allowance in respect of new plant and machinery in notified backward areas under Section 32AD
(iv) Tea/Coffee/Rubber development benefit under Section
(v) Site restoration benefit under Section 33ABA
(vi) Various deductions for donation for expenditure on scientific research or social sciences research under section 35(1)(ii), section 35(1)(iia), section 35(1)(iiia) or under section 35(2AA) (vii) Accelerated capital deduction for specified businesses under Section 35AD
(viii) Expenditure on agricultural extension project under Section 35CCC
(ix) All deductions allowed under Chapter VI-A (except the deduction under Section 80 JJAA).
B. Prescribed set off of losses not allowed
(i) Such co-operative society, which exercises such option, shall not be allowed to set off any loss or depreciation carried forward from an earlier assessment year if such loss or depreciation is attributable to any other deductions referred to in points (i) to (ix) above.
C. Loss or Depreciation specified under heading B deemed to have been given the full effect
Carried forward loss or depreciation shall be deemed to have given full effect to and no further adjustment in respect of such carried forward loss or depreciation shall be available meaning thereby that such loss or depreciation carried forward shall lapse.
D. Adjustment in WDV of the block
If the option to pay tax under section 115BAC is exercised in respect of assessment year 2021-2022, then the written down value of the block of asset shall be increased by the amount of depreciation carried forward which is not available for set-off due to the restrictions contained in the proposed newly inserted section 115BAC.
E. When to exercise option of paying the tax at the applicable rates under this section?
(i) An assessee having business/professional income has to exercise the option on or before the due date U/s 139(1) for furnishing return of income for any previous year relevant to assessment year on or after 01.04.2021 and such option once exercised shall apply to subsequent assessment years.
F. Change of option after exercising this option
The proviso to the said sub-section provides that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.
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