New IT Act 2025 — Knowledge Bank

Tax on income of certain new manufacturing co-operative societies

Section 204 — Tax on income of certain new manufacturing co-operative societies

Old Act equivalent: Section 115BAE of IT Act 1961 Sub-part: C—New tax regime

Statutory Text

  1. (1) Irrespective of anything contained in this Act but subject to the provisions of Part A, B, E and this Part (other than section 203) of this Chapter, the in come-tax payable in respect of the total income of an assessee, being a co-operative society, resident in India, engaged in the business of manufacture or production of any article or thing, shall at the option of such assessee, be computed at the rates specified in column A of the said Table, if the conditions contained in column B thereof are fulfilled. TABLE Total income and rate of tax Conditions A B (a) 15% on the total income other than the income mentioned in clauses (b), (c) and (d); (b) 22% (without any deduction or allowance in respect of any ex penditure or allowance) on such income,—

(i) which has neither been de rived from nor is incidental to manufacturing or production of an article or thing; and Such co-operative society— (a) exercises the option in the manner provided in sub-section (2); (b) has been set-up and registered on or after the 1st April, 2023; (c) has commenced manufacturing or production of an article or thing on or before the 31st March, 2024; (d) the total income of which is com puted as per the provisions of sub-section (3); and Total income and rate of tax Conditions A B

(ii) in respect of which no specific rate of tax has been provided separately under this Part; (c) 22% on short-term capital gains derived from transfer of a capital asset on which no depreciation is allowable under this Act; (d) 30% on the income deemed so under section 205(4). (e) fulfils all the conditions provided in section 205(2). (2) The option under this section shall be exercised by the assessee in the manner as may be prescribed subject to the following conditions:—

(a) it shall be exercised on or before the due date specified under section 263(1) for furnishing the first of the returns of income for any tax year; and

(b) such option, once exercised, shall apply to subsequent tax years;

(c) once the option has been exercised for any tax year, it shall not be sub sequently withdrawn for the same or any other tax year;

(d) where the assessee fails to fulfil the conditions contained in sub-section (1) (Table: Sl. No. 1.B) in any tax year,—

(i) the option shall become invalid in respect of such tax year and subsequent tax years; and

(ii) the other provisions of this Act shall apply, as if the option had not been exercised for that tax year and subsequent tax years. (3) For the purposes of sub-section (1), the total income of the assessee shall be computed,—

(a) without any deduction under—

(i) Chapter VIII other than the provisions of section 146 [ or 150]; or

(ii) sections specified in section 205(1)(a) to (g)32;

(b) without set off of any loss carried forward or depreciation from earlier tax year, if such loss or depreciation is attributable to any of the deductions referred to in clause (a). (4) While computing the income of the assessee, the loss and depreciation, or both, as specified in sub-section (3)(b) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation, or both, shall be allowed for any subsequent year. [(5) In case of an assessee, being a co-operative society, which has exercised option under sub-section (2), the requirements contained in sub-section (3) shall be modified Conditions for tax on income of certain companies and co-operative societies.

Provisos

None.

Explanations

None.

Tables

See statutory text above.

Key Structure

  • Applies to: New manufacturing co-operative society set up and registered on or after 1-Apr-2023, commencing manufacture by 31-Mar-2025.
  • Conditions: Option exercised; income computed without specified deductions; not formed by splitting/reconstruction.
  • Time limits: Option before due date for filing return; irrevocable.
  • Monetary limits: Tax at 15% plus applicable surcharge and cess.
  • Exceptions: Conditions in section 205 apply.

Cross-References

Amendment Notes

None noted from the extracted pages.

Practical Notes

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