Are certain Co-operative Banks like Saraswat Bank etc, a Co-operative society

[RAJESH SANGHVI]

The ITO has taken a view that Saraswat Co-op Bank or Shamrao Vithal Co-op Bank ( or Maharashtra state Co-operative Bank ) are Co-operative banks but they ARE NOT CO-OPERATIVE SOCIETIES. Hence if any co-operative housing society (CHS) earns interest from these co-op banks, the said CHS is not entitled to 100% deduction of that interest u/s 80P(2)(d) because this section speaks of earning interest from Co-operative societies and NOT co-operative banks. My stand is captured u/s 2(10) of the Maharashtra co-operative Societies Act 1960 ( which defines Co-op Bank ) and these banks are societies under the Multi State Co-op Soc Act 2002. Hence they are co-op bank and also Co-op Societies. Hence CHS should get benefit of full 100% deduction u/s 80P(2)(d)..

AI Summary

Debate on Cooperative Banks' Status Affects Housing Societies' Tax Deductions Under Section 80P(2)(d) of Income Tax Act. The issue raised involves whether certain cooperative banks, such as Saraswat Co-op Bank and Shamrao Vithal Co-op Bank, are considered cooperative societies. The Income Tax Officer (ITO) argues that these banks are cooperative banks but not cooperative societies, affecting the eligibility of cooperative housing societies (CHS) for a 100% interest deduction under section 80P(2)(d) of the Income Tax Act. The counterargument is based on the definition under the Maharashtra Co-operative Societies Act 1960 and the Multi-State Co-operative Societies Act 2002, suggesting these banks qualify as both cooperative banks and societies, thus entitling CHS to the deduction.