By Anca Voinea
The government of India has adopted a series of support measures to boost the country’s co-operative dairy sector.
They include an exemption of income tax for dairy co-operative societies, which will apply to primary co-ops supplying milk to a federal co-operative society. The exemption will allow the co-ops to claim deductions for their entire profit related to milk supply to Union societies under Section 80P of the Income Tax Act, 1961.
In addition to this measure, the government has also reduced the surcharge on co-ops from 12% to 7% for incomes exceeding ?10m (£95,517) and up to ?100m (£955,176). Furthermore, the rate of Alternate Minimum Tax for co-operative societies has been lowered from 18.5% to 15%, which puts these on par with companies.
Other support measures introduced include no penal consequences where a deposit is repaid by a primary agricultural credit society (PACS) or an agricultural and rural development bank (PCARDB) to its member or such loan is repaid to a PACS or a PCARDB by its member in cash, if the amount of such loan or deposit including their outstanding balance is less than ?200,000 (£1,910), up from the previous ?20,000 limit (£191); a higher threshold of ?30m (£286,552) for TDS on cash withdrawal and interest subvention on short-term crop loans up to ?300,000 (£2,865) for farmers, at a rate of 7% per annum, with prompt repayments leading to an additional 3% interest subvention.
The measures were announced by the Union Minister of Fisheries, Animal Husbandry & Dairying, Shri Parshottam Rupala in a written reply in parliament on 6 February.
