NCUI the apex organization of the Indian cooperative movement has welcomed the Budget proposal of bringing cooperatives at par with corporates by reducing the tax rate from 30% to 22%.
Talking about it NCUI Chief Executive, N. Satya Narayana said “Parity in taxation between cooperatives and corporates was the need of the hour as cooperatives had been discriminated against despite their contributions for the welfare of the deprived sections of society.
NCUI had also been fighting for an increase in deposit insurance coverage of banks from Rs. 1 lakh to Rs. 5 lakhs. The fulfilment of this long-standing demand would ensure the safety of customers of cooperative banks, he said.
Satya Narayana said that expansion of NABARD Refinancing Scheme and agricultural credit target for the year 2020-21 being set at 15 lakh crore rupees will enable cooperative banks more particularly PACs to enhance their loaning operations which will further benefit the poor.
The CE also hoped that proposed amendments in the Banking Regulation Act will infuse professionalism and bring in transparency in the functioning of cooperative banks.
In the union budget tabled by the Finance Minister benefitting large co-operatives such as IFFCO, Kribhco, Amul or Campco, a Parity has been proposed between cooperatives and corporate sector in the matter of taxation.
It has given the Option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.
Additionally, cooperative societies were exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).
The move has been welcomed by co-operators of all hues across states in the country.