Income Tax Rates for Co-operative Societies – Past Seven Years

Introduction

Co-operative societies in India are entities registered under cooperative law (state or central) that work for their members’ mutual benefit. Their income tax treatment under the Income Tax Act includes normal slab rates and optional concessional regimes. Unlike other entities, a cooperative society’s tax depends on whether it opts for a concessional scheme (e.g. under Section 115BAD or 115BAE) and the nature of its deductions. Over the past seven years, changes have come mostly via new optional schemes; the basic slab structure has remained stable. Below is a year-wise overview of co-operative society tax rate from FY 2018-19 to FY 2025-26 (AY 2019-20 to AY 2026-27) based on Finance Acts, CBDT notifications, and tax analysis sources.

Year-Wise Co-operative Society Income Tax Rates   

Notes on Effective Rate / Observations: 

• Under the normal slab, cooperative societies pay progressive rates: 10%, 20%, 30%.

• Under the income tax co-operative society optional regime (115BAD), flat 22% applies (without many deductions).

• For new manufacturing cooperative societies, for income from manufacturing started before March 31, 2024, 15% rate under 115BAE is available.

• Surcharge has been moderated: the surcharge for income > ₹1 cr up to ₹10 cr has been reduced from 12% to 7%.

• AMT for co-operative societies is generally 15% of adjusted total income when deductions claimed.

• Health & Education Cess at 4% is consistently applied on tax + surcharge.

Key Insights on Co-operative Society Taxation   

1. Tax Treatment & Slab Rates

Co-operative societies are taxed under the slab system:

• 10% on income up to ₹10,000

• 20% on income between ₹10,001 and ₹20,000

• 30% on income exceeding ₹20,000

They may instead opt for a concessional regime where they pay a fixed co-operative society tax rate (e.g. 22%) by foregoing certain deductions.

2. Optional Regimes (115BAD / 115BAE)

• Section 115BAD: Available to co-operative societies from FY 2020-21 onward. If the society opts for it, it pays tax at 22% without claiming specified deductions or incentives.

• Section 115BAE: For new manufacturing cooperatives set up on or after April 1, 2023, income from manufacturing may be taxed at 15%.

3. Surcharge & Health & Education Cess

• Surcharge: 7% of tax if total income > ₹1 cr but ≤ ₹10 cr; 12% if > ₹10 cr.

• Health & Education Cess: 4% on (tax + surcharge).

4. Alternate Minimum Tax (AMT)

• When a co-operative society claims deductions under certain sections, AMT under Section 115JC comes into play. The AMT rate is 15% of adjusted total income.

• Cooperatives opting for 115BAD / 115BAE are generally exempt from AMT.

5. Effective Tax Burden

• Under the slab regime, the effective tax rate depends on which slab income falls into, surcharge, and cess.

• For those opting 115BAD, the effective burden is 22% + surcharge + cess, but many deductions are forfeited.

• New manufacturing cooperatives under 115BAE get a lower burden of ~15% + surcharge + cess (for their manufacturing income).

Conclusion   

The co-operative society tax rate in India over the past seven years has predominantly been governed by slab rates (10%, 20%, 30%) under the normal regime. The introduction of optional schemes like Section 115BAD (22%) and 115BAE (15% for qualifying new manufacturing co-ops) gave societies alternate routes with trade-offs in deductions. Surcharge reductions and AMT alignment further eased the burden. Entities must carefully choose between slab vs concessional regime based on their operations and deductions.

Suggested Read :

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Income Tax Rates Slab for FY 2021-22 (AY 2022-23)

Income Tax Rates Slab for FY 2020-21 (AY 2021-22)

Income Tax Rates Slab for FY 2019-20 (AY 2020-21)

FAQs on Co-operative Society Taxation