A cooperative society means, a society registered or deemed to be registered under any law relating to cooperative societies for the

time being in force in any State or under the Central act. Cooperative societies may be governed by the respective State cooperative societies Act or by the Multi-State Cooperative Societies Act, 2002. The societies whose main objective is to serve the interests of its members in a particular State, are governed by the Cooperative Societies Act of that particular State. While, a Society whose main objectives is to serve the interests of its members in more than one State, are governed by the Multi-State Cooperative Societies Act, 2002 . According to the Cooperative Societies Act of each State, a cooperative society registered within any State under the law of that State is not allowed to operate in other States without the permission of the Government or Registrar of Cooperative Societies of that State. In case of multi-State cooperative society, it can operate in more than one State as a matter of right, under the Act and no permission of any State is required to do its business. Provisions for Taxation of a Cooperative Society A Cooperative Society is a taxable entity under the Income Tax Act ,1961 . A Cooperative Society under the Act is to be treated as an association of persons (AOP), which is included in the definition of ' person ' under the Income Tax Act,1961. Even though, for taxation purposes, the status of a cooperative society is to be taken as an Association of Persons, the section 67A and section 86 of the Act have been excluded from application to the members of society. A Cooperative Society is taxed at rates, which are different from those applicable to an AOP. Under the annual Finance Act , though individuals, Hindu undivided family, AOP or body of individuals , whether incorporated or not , or every artificial juridical person referred to in the Income Tax Act, are chargeable at rates prescribed in paragraph A, of the Finance act. A Cooperative society is chargeable to tax as per rates prescribed under paragraph B of Part1 of the first schedule to the annual Finance Act . The amount of income tax computed in accordance with the provisions of paragraph B , shall in the case of every cooperative society, be increased by a surcharge . The rate of surcharge is prescribed in each of the Finance Acts . The Cooperative Societies are entitled to several concessions, in the computation of their taxable income. Besides, they also enjoy the benefit of concessional rate of tax on their chargeable income under the annual Finance Act . As per Wealth Tax Act [Section 3(1)], only individuals, Hindu undivided families and companies are liable to wealth tax. Thus, no wealth tax is charged in the case of cooperative society.