Though the news was broken earlier by Indian Cooperative, the present piece is culling of major points put before the group of Minister by the Sahakar Bharati in a four-hour long meeting at Arun Jaitley’s residence in Delhi last week.
(1) Sahakar Bharati has sought restoration of income tax exemption to cooperative banks by deleting the sub-section 80P(4) that was introduced in the Union Budget in 2006.
It quoted the global tax practices for the cooperatives sector, and said that 67% of countries in Asia and 62% of countries in Africa exempt earnings of credit cooperatives while it is 81% in Latin American Countries, 38% in Europe and 94% in Caribbean, quoting World Council of Credit Unions. In India too, the sector was exempted till 2006.
(2) It sought the extension of section 43D of income tax act to be made applicable to all non-scheduled banks. The benefits of this section are currently being enjoyed by public or state financial institution or a scheduled bank.
“The facility of this section is not available to non-scheduled banks. As only 51 out of nearly 1600 urban coop. banks are scheduled and many State coop. banks and DCCBs are also non- scheduled, suitable amendments to the section 43D to include them has to be made to explicitly extend the benefit of the section to all non scheduled cooperative banks,” the memorandum said.
(3) Sahakar Bharati has also sought inclusion of cooperative bank after schedule bank in clause (xxi) of section 80(c) that allows term deposit for a fixed period of not less than five years with a schedule bank be included as investments eligible for deduction for purpose of section 80 (c). Since, only 51 out of 1600 urban cooperative banks are scheduled banks, non-scheduled urban co-operative banks are at disadvantage as deposits are shifted to scheduled banks.
(4) It has also demanded restoration of benefit under section 36 (1) (vii a), which was taken away in 2006 when income tax was levied with the introduction of section 80 (P)(4) for income computed.
These points were raised before the Finance Minister Arun Jaitely by Sahakar Bharati President Shri Jyotindra Mehta, who also holds position as the Chairman of Gujarat Urban Banks Federation, Member, Governing Council National Cooperative Union of India (NCUI),New Delhi and Director on the Board of National Federation of Urban Cooperative banks and Credit Societies(NAFCUB),New Delhi. He was accompanied by Shri Uday Joshi, General Secretary,Sahakar Bharati, and Sh. D .Krishna former Chief Executive, NAFCUB.
Established in 1979, Sahakar Bharati is a registered non government organization set up to promote and propagate the concept of cooperative institutions across all spectrum of the society for economic growth without economic disparity and lead to inclusive and sustainable development.