Comparison of Section 149 "Deduction in respect of income of co-operative societies." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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...., limited interest/house property income) and conditions relating to voting rights for societies engaged in labour/fishing activities. The provision affects co-operative societies (primary and others); effective date or commencement is Not stated in the document. Background & Scope Statutory hooks: Clause 149 sits in the chapter dealing with "Deductions in respect of certain incomes" in the Income Tax Bill, 2025. The clause is intended to grant specified tax deductions to co-operative societies on certain classes of income. The text provides coverage of the types of co-operative societies and activities that qualify, thresholds for small-value activities, and special treatment for income from investments in other co-operative societies. C....

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....d Government companies/corporations, the whole of such business profits and gains are deductible. * Clause 149(2)(c): For co-operative societies engaged in activities not specified in (a) or (b), an amount of profits and gains attributable to such activities is deductible up to prescribed small thresholds-one lakh rupees for consumers' co-operative societies and fifty thousand rupees for others. * Clause 149(2)(d): Income by way of interest or dividends from investments with any other co-operative society is wholly deductible. * Clause 149(2)(e): Income derived from letting of godowns or warehouses used for storage, processing, or facilitating marketing of commodities is wholly deductible. * Clause 149(2)(f): For co-operative so....

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.... collective disposal of labour and fishing/allied activities on the society's rules restricting voting rights to specified classes: (i) individuals who contribute labour or carry on fishing/allied activities; (ii) co-operative credit societies which provide financial assistance; (iii) the State Government. This is a membership/control test to ensure genuine member-based governance. Clause 149(2)(f) carves out several categories of societies (housing, urban consumers' societies, transport, manufacturing with power) from the small gross-income relief. The relief under (f) only applies if gross total income does not exceed twenty thousand rupees. Illustrations * Example 1: A primary milk co-operative supplying milk to a federal co-....

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....(Bill) expressly refers to reduction of deduction u/s 80-IA of the Income-tax Act, 1961, whereas Section 149(4) (Act) refers generically to "section 138". * Practical impact: The enacted provision substitutes a different cross-reference (section 138) which likely reflects renumbering/restructuring in the revised Act; taxpayers and practitioners must verify which contemporary provision (section 138) corresponds to former section 80-IA relief before applying the interaction rule. * Wording on application condition for certain societies: Clause 149(3) states "provisions of sub-section (2) shall apply when the rules and bye-laws... restrict the voting rights to the following classes of members," while Section 149(3) in the Act states the de....

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....ces were misaligned; practitioners must confirm which sub-section each condition attaches to when applying the enacted text. Practical Implications * Compliance/risk areas: Co-operative societies must allocate and document profits attributable to qualifying activities (particularly where societies undertake both specified and non-specified activities) to substantiate claims under (2)(a)/(b)/(c). For fishing/labour co-operatives, bye-laws restricting voting are a precondition - compliance requires careful governance documentation and possible amendment of bye-laws where necessary. * Interaction with other deductions: Entities claiming both section 80-IA and Clause 149 relief must compute netting as provided; failure to reduce the 80-IA ....