Section 28 of the Co-operative Societies Act, 1912: Power to Exempt from Income-tax, Stamp Duty and Registration Fees
Section 28 of the Co-operative Societies Act, 1912 deals with statutory powers to grant specified fiscal and registration-related remissions to a registered co-operative society or a class of registered societies.
Text and scope of Section 28
Section 28(1): The Central Government may, by notification in the Official Gazette, in the case of any registered society or class of registered societies, remit the income-tax payable in respect of the profits of the society or the dividends or other payments received by members on account of profits.
Section 28(2): The Government may, by notification in the Official Gazette, remit the stamp duty chargeable on instruments executed by or on behalf of a registered society, or by an officer or member where the instrument relates to the business of the society, and may also remit fees payable under the law relating to registration.
Meaning of the important expressions
Registered society
Under the Act, a registered society means a society registered or deemed to be registered under the Co-operative Societies Act, 1912. The benefit contemplated by Section 28 is therefore tied to the statutory status of a registered co-operative society or a notified class of such societies.
Remit
In this context, "remit" refers to the statutory power to waive or release the specified tax, duty or fee to the extent authorised by a valid Government notification. The practical availability and extent of a remission must therefore be checked against the applicable notification and the law currently governing the particular levy.
Notification in the Official Gazette
The section expressly contemplates exercise of the exemption or remission power through an Official Gazette notification. Registration of a society alone should not be treated as proof that a particular tax, stamp duty or registration fee has been remitted.
Income-tax remission under Section 28(1)
Sub-section (1) preserves a Central Government power concerning income-tax on profits of a registered society and dividends or other profit-related payments received by its members. For present-day tax treatment, Section 28 should be read together with the applicable provisions of the Income-tax Act, 1961 and any valid notification or other statutory provision governing the relevant assessment.
Stamp duty and registration fees under Section 28(2)
Sub-section (2) deals separately with remission of stamp duty on qualifying instruments and fees payable under registration law. The provision also allocates the meaning of "Government" for specified classes of stamp duty: for the instruments and Union List matter identified in the section, it means the Central Government; otherwise, it means the State Government.
Historical amendments noted in the Act
Section 28 was re-numbered as sub-section (1) by the Repealing and Amending Act, 1920, and sub-section (2) was added by that legislation. Later adaptations substituted constitutional terminology, including the reference to "entry 96" in List I of the Seventh Schedule to the Constitution. The Act also records historical territorial amendments and repeals.
Practical effect of Section 28
Section 28 is best understood as an enabling provision. It identifies the competent Government and the kinds of fiscal charges that may be remitted through notification. Whether a particular society, transaction, instrument or payment actually receives a remission depends on the operative legal framework applicable to that case.
Official legal source
For the authoritative Central Act text and its statutory footnotes, see the Co-operative Societies Act, 1912 on India Code.
Editorial note
This page explains the Central enactment. Co-operative societies are also governed by State-specific co-operative societies laws and other applicable tax, stamp and registration legislation. Users should verify the law and notifications applicable in the relevant State or Union Territory and to the particular transaction.