A 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 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.

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