Since the regular Union Finance Minister Arun Jaitley has gone to the USA for treatment, there have been no pre-budget consultations with leaders of the cooperative banking sector in the country. The sector has been clamoring for IT exemption for several years now.
However, buoyed up with Piyush Goyal taking charge, Sahakar Bharati lost no time in sending him a list of its demands. Goyal, who is held as more sympathetic to the issues of the co-op banking sector in comparison to Jaitley is currently busy giving the finishing touches to the Modi govt’s last budget in the election year.
Signed by the President, the General Secretary and the Patron, Sahakar Bharati letter (a copy is with Indian Cooperative) argues that stakeholders of the co-op sector come predominantly from lower and middle income segments of society and thus need a soft-handling.
There are over 8.50 Lakhs cooperatives having membership of about 25 crore people , it avers. In the case of the Urban Cooperative Banking Sector, which comprises of about 1550 Banks, 95% of loan accounts have an average ticket size of just about Rs 5 Lakh.
It is for this reason the Government vide Section 80(P) of Income Tax Act 1961 kept the surplus of these Banks outside the purview of Income Tax. Unfortunately, in 2006, the Govt withdrew the above provision and UCBs were brought under the Tax Net.
The letter reminds the NDA govt of its promise made in the election manifesto and demands restoration of the benefits under Section 80 (P) to the entire UCB Sector, comprising of about 1550 banks.
It also asks for exemption of all small single unit UCBs which number about 700 and all for other Non-Scheduled UCBs. Demanding a parity with the MSME sector it asks the govt to levy Income Tax at 25% on all Scheduled UCBs just as the tax is applied to MSMEs.
Knowing well that all FMs are essentially the same, Sahakar Bharati leaders are keeping their fingers crossed. Satish Marathe, the senior leader said “Let us see, I hope they will listen to us this time”.
Jyotindra Mehta, another senior leader and currently the Patron of the organization said even if they tax only the scheduled Banks, majority of us would be out of the tax ambit.
Mehta and his team had earlier met Union Minister of State for Finance Shiv Pratap Shukla and had submitted their list of expectations from the Budget to him.