The Finance Bill, 2026 has proposed no change in the income-tax structure applicable to co-operative societies for the assessment year 2026–27 and the tax year 2026–27, according to the provisions relating to direct taxes.
As per Paragraph B of Part I-A and Part I-B of the First Schedule, co-operative societies will continue to be taxed under a separate tax regime, with income-tax rates remaining unchanged at 10 per cent on income up to Rs 10,000, 20 percent on income between Rs 10,001 and Rs 20,000, and 30 per cent on income exceeding Rs 20,000.
The surcharge structure applicable to co-operative societies has also been retained without modification. A surcharge at the rate of 7 per cent will continue to apply where the total income exceeds Rs 1 crore but does not exceed Rs 10 crore, while a 12 per cent surcharge will apply where total income exceeds Rs 10 crore. The provision for marginal relief in surcharge cases remains unchanged.
The Bill further reiterates that a resident co-operative society may opt for concessional taxation at 22 per cent under section 203 of the Income-tax Act, 2025, subject to fulfilment of prescribed conditions. In such cases, a 10 per cent surcharge shall be applicable on the tax so computed.
In addition, the Health and Education Cess at the rate of 4 per cent on income-tax, inclusive of surcharge wherever applicable, will continue to be levied on co-operative societies for the tax year 2026–27, with no marginal relief available in respect of the cess
The Finance Bill explicitly states that no changes have been proposed in tax rates or surcharge provisions for co-operative societies, and the existing framework will continue as enacted for the previous financial year.