Section 203 — Tax on income of certain resident co-operative societies

(1) Irrespective of anything contained in this Act but subject to the provisions
of Part A, B, E and this Part (other than section 204) of this Chapter, the
income-tax payable for a tax year shall be at the rate of 22%, at the option of a
person being a co-operative society resident in India, in respect of the total income
of such person computed in the following manner:—
( a) without any deduction under—
( i) Chapter VIII other than the provisions of section 146 26[or 150]; or
( ii) sections specified in section 205(1)(a) to (g);
( b) without set off of any loss carried forward or depreciation from any
earlier tax year, if such loss or depreciation is attributable to any of the
deductions referred to in clause (a).
(2) Where a person fails to satisfy the requirements contained in sub-section (1)
in any tax year, the option shall become invalid in respect of the said tax year and
26. Inserted by the Finance Act, 2026, w.e.f. 1-4-2026.
subsequent tax years and other provisions of the Act shall apply, as if the option had
not been exercised for such tax year and for subsequent tax years.
(3) The loss and depreciation referred to in clause ( b) of sub-section (1) shall be
deemed to have been given full effect to and no further deduction for such loss or
depreciation shall be allowed for any subsequent tax year.
(4) In case of a person, having a Unit in the International Financial Services Centre,
which has exercised option under sub-section (5), the requirements contained in
sub-section (1) shall be modified to the extent that the deduction under section 14722
shall be available to such Unit subject to fulfilment of the conditions contained in
the said section.
(5) The provisions of this section shall not apply unless the option is exercised by
the person in the prescribed manner on or before the due date specified under
section 263(1) for furnishing the return of income and such option once exercised
shall apply to subsequent tax years.
(6) Once the option under this section has been exercised for any tax year, it shall
not be subsequently withdrawn for the same or any other tax year.
26[(7) In case of an assessee, being a co-operative society, which has exercised option
under sub-section (5), the requirements contained in sub-section (1) shall be modified
to the extent that the deduction under section 149(2)(d)(ii) shall be available to such
assessee as does not exceed the amount of dividend distributed by it to its members at
least one month before the due date for filing the return of income under section 263(1).]