Co-operative Societies: RBE No.6A/1989 – Levy of Income-tax
No.87/E(Coop)/25/2, dated 05.01.1989
Sub: Levy of Income-tax on Railwaymen’s Co-operative Societies.
1. Kindly refer to Board’s letter No.60/E(Coop)/15/1, dated 16.08.1960, on the above subject, a copy of which is enclosed for ready reference, wherein it has, inter-alia, been provided that ‘Consumer Co-operative Societies will have to pay Income-tax in respect of so much of their profits and gains of their business as are in excess of Rs.15000 in any year. This limit of Rs.15000 has since been revised to Rs.40000 by the Ministry of Finance.
2. The Railway Administrations are requested to advise accordingly the Consumer Co-operative Societies in their jurisdiction of the latest position.
No.60/E(Coop)/15/1, dated 16.08.1960
Sub: Levy of Income-tax profits of Railwaymen’s co-operative societies.
1. The attention of the General Managers is invited to Section 14(3) of the Indian Income-tax Act as amended by Section 6 of the Finance Act, 1960 under which profits and gains of business carried on by certain types of co-operative societies are exempted from Income-tax. So far as the Railwaymen’s co-operative societies are concerned, the position is clarified below:
(i) Railwaymen’s Co-operative Credit Societies/ Banks:
No tax is payable on the profits and gains of business carried by these societies as they are engaged in providing credit facilities to their members.
(ii) Railwaymen’s Consumer Co-operative Societies:
(a) Consumer Co-operative Societies will have to pay Income-tax in respect of so much of their profits and gains of business as are in excess of Rs.15000 in any year.
(b) Where a consumer co-operative society makes bulk purchases of commodities which it sells to its members, the rebate passed on to the members on the value of purchases made by them during a year will be treated as deferred discounts and allowed as a deduction in computing the taxable income.
Railway Administrations are requested to advise the consumer co-operative societies in their jurisdiction of the new provisions of the Finance Act.
Download Railway Board Circular RBE No.06A/1989
Forward reference ⇒ RBE No.