Section 115BAD: Alternate Taxation Scheme for Co-Operative Societies

Ritik Chopra | Last updated: 02 May 2021

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Quick Summary

Section 115BAD offers a special tax scheme for resident co-operative societies in India, allowing them to opt for a 22% tax rate on their income from assessment year 2021-22 onwards. However, to avail this option, certain conditions must be met. These include not claiming various exemptions, deductions, or setting off losses that were carried forward from previous years, with a few exceptions. If these conditions aren't fulfilled, the option becomes invalid for the current and subsequent assessment years.

(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

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FAQ :

Section 115BAD is an alternate taxation scheme for co-operative societies in India, allowing them to pay tax at a rate of 22% if specific conditions are met.

A co-operative society can opt for this scheme for any previous year relevant to the assessment year beginning on or after 1st April 2021, provided it satisfies the prescribed conditions.

If the conditions are not satisfied, the option to pay tax under Section 115BAD becomes invalid for that assessment year and all subsequent years. Other provisions of the Income Tax Act will then apply.

Under Section 115BAD, exemptions like SEZ units (Section 10AA), additional depreciation, investment allowance, deductions for scientific research, accelerated capital deductions, and most deductions under Chapter VI-A (except Section 80 JJAA) are not permitted.

No, a co-operative society opting for Section 115BAD cannot set off any loss or depreciation carried forward from earlier years if it relates to deductions not allowed under this scheme. Such carried forward losses or depreciation will lapse.

Once the option to pay tax under Section 115BAD is exercised for a previous year, it cannot be withdrawn or changed for the same or any subsequent previous year.