The Centre on Wednesday announced a major relief for cooperative federations by granting a three-year tax exemption on dividend income. Finance Minister Nirmala Sitharaman made the announcement in the Lok Sabha during discussions on the Finance Bill 2026, media reports say.
She said the move is aimed at boosting incomes of small cooperative members and encouraging wider participation in the sector. The exemption is expected to strengthen grassroots institutions and improve financial viability.
Highlighting the role of cooperatives alongside MSMEs and farmers, Sitharaman noted that these sectors are central to employment generation and economic growth, particularly in rural India, and remain vital for inclusive and balanced development.