Interest On Statutory Deposits Integral To Lending Business Qualifies For Deduction U/S 80P(2A)(I) : ITAT

The ITAT ruled that interest earned on statutory deposits which are integral to a lending business is eligible for deduction under Section 80P(2A)(i). The tribunal examined whether the deposits are incidental and essential to the business of lending. Since such deposits essentially facilitate business operations, the interest income qualifies for deduction rather than being treated as unrelated income. The decision clarifies the ambit of 80P(2A)(i) for credit societies and similar financial entities.