The ITAT Ahmedabad held that interest income from co-operative banks is eligible for a deduction under Section 80P, aligning with prior Gujarat High Court rulings.
ITAT Ahmedabad Confirms Section 80P Deduction for Co-Op Banks
The Income Tax Appellate Tribunal (ITAT) Ahmedabad ruled that interest earned from deposits in cooperative banks qualifies as a deduction under Section 80P(2)(d) of the Income Tax Act. This ruling follows previous judgments by the Gujarat High Court affirming similar treatment for co-operative societies.
The Tribunal found that cooperative banks, being classified as cooperative societies, are entitled to the same benefits as other cooperative entities under Section 80P. The decision underscores the recognition of cooperative banks within the framework of cooperative legislation.
This landmark ruling encourages individuals and entities to engage with cooperative banks, knowing that their interest income would be treated favorably under tax regulations.
For legal practitioners, this case highlights the potential for tax savings strategies involving cooperative banks, advising clients on the advantageous deductions available under the Income Tax Act.
Citations
- ITAT Ahmedabad (2026) TaxGuru
