Deduction Under Sec 80P(2)(d)

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This discussion clarifies the eligibility of housing societies for deduction under Section 80P(2)(d) of the Income Tax Act, particularly concerning interest earned from investments in co-operative societies. It addresses a common filing error related to the eligible deduction amount, referencing Supreme Court and High Court rulings that support such claims. The core issue is how to correctly report income and claim the deduction to avoid system-generated errors.

Anil Sharma

Anil Sharma (Querist)

27 July 2023 A housing society is claiming deduction under sec 80p(2)(d) of interest received from investment in co-operative society . Society has also received interest from saving account maintained in other op-operative society. But housing society is claiming deduction only in respect of interest from investment in co-operative society by declaring in income from other source head
Interest from FDR In Other Co-operative Society 50000
Interest From Saving Account maintained in other Co-operative Society - 15000

I am claiming deduction under section 80P(2)(d) of amount Rs. 50000

Error : In Schedule 80P, the amount in Sl. No. (11) amount eligible for deduction should not be more than sum of Sl. No. 1(a)+1(bii) of Schedule OS + 5(ii) and 5(xiii) of Schedule BFLA subject to interest and dividend declared in Schedule P&L.;#;Kindly restrict The amount eligible For deduction mentioned in Sl. No. (11) of Schedule 80P to the sum of amount mentioned in field dividend gross and Interest from Deposits (Bank/ Post Office/ Co-operative Society) i.e Sl. No. 1(a) + 1(bii) of Schedule OS+ 5(ii) and 5xiii of Schedule BFLA subject to interest and dividend declared in Schedule P&L

Radhakrishnan K.V.

Radhakrishnan K.V. (Expert)

28 July 2023 Your society is eligible for deduction u/s 80P(2)(d) as held by Hon. Supreme Court of India in MAVILAYI SERVICE COOPERATIVE BANK LTD. & ORS. vs. COMMISSIONER OF INCOME TAX, CALICUT & ANR. [CIVIL APPEAL NOS. 7343-7350 OF 2019 dated 12/1/2021]. There are several other decisions of appellate authorities like ITAT, Pune in Rena Sahakari Sakhar Karkhana Ltd., vs. Pr. Commissioner of Income-tax 2, Aurangabad. Also see Kerala High Court Order in PRINCIPAL COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM vs. PEROORKADA SERVICE CO-OPERATIVE BANK LTD [ITA NO. 323 OF 2019].

Anil Sharma

Anil Sharma (Querist)

28 July 2023 Yes Sir according to me also society is eligible to claim deduction under section 80P(2)(d) but my query is under which head we need to show the income so that above mentioned error got solved or what does that error means i am confused

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