9 Income Tax relief to Cooperative Societies including Cash Transactions u/s 269T: Minister Amit Shah's Rajya Sabha Reply
The income tax reliefs provided to the cooperatives was listed by the Minister of Cooperation Amit Shah in his written reply before the Rajya Sabha
The central government has provided 9 income tax relief measures to cooperative societies, intending to improve their financial stability and supporting their members, particularly in rural and farming communities. In a written reply to a question in the Rajya Sabha, Minister of Cooperation Amit Shah detailed the following key reliefs: Reduction in Surcharge: The surcharge for...
The central government has provided 9 income tax relief measures to cooperative societies, intending to improve their financial stability and supporting their members, particularly in rural and farming communities.
In a written reply to a question in the Rajya Sabha, Minister of Cooperation Amit Shah detailed the following key reliefs:
Reduction in Surcharge: The surcharge for cooperative societies with income exceeding ₹1 crore and up to ₹10 crore has been reduced from 12% to 7%. This step is expected to increase the disposable income of cooperative societies, benefiting their members.
Reduced Alternate Minimum Tax (AMT): The AMT rate for cooperative societies has been reduced from 18.5% to 15%, aligning it with the rate applicable to companies, thus creating a level playing field.
Relief in Cash Transactions (Section 269ST): Section 269ST restricts cash receipts exceeding ₹2 lakh, but penalties were previously imposed on milk cooperative societies for transactions spread over multiple days. A clarification issued by the CBDT now excludes dealership or distributorship contracts from being considered a single event, enabling cooperative societies to operate without fear of penalties.
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Concessional Tax Rate for New Manufacturing Cooperatives: New cooperatives commencing manufacturing activities before March 31, 2024, are eligible for a reduced tax rate of 15%, akin to new manufacturing companies.
Relaxation in Cash Loans and Deposits (Section 269SS): The cash limit for loans or deposits by Primary Agricultural Credit Societies ( PACS ) and Primary Cooperative Agricultural and Rural Development Banks (PCARDB) has been increased from ₹20,000 to ₹2 lakh, exempting them from penalties for transactions below this threshold.
Relief for Loan Repayments in Cash (Section 269T): Similarly, the cash repayment limit for loans or deposits by PACS and PCARDB has been raised from ₹20,000 to ₹2 lakh, mitigating penalties for small-scale transactions.
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Higher Cash Withdrawal Limit Without TDS: Dairy cooperatives and other rural cooperatives can now withdraw up to ₹3 crore in cash annually without TDS, up from the previous limit of ₹1 crore.
Income Tax Relief for Sugar Cooperative Mills: Tax liabilities for additional sugarcane price payments by sugar cooperative mills have been resolved retroactively from April 1, 2016. This measure has clarified ambiguities and mitigated tax burdens for sugar mills.
Resolution of Historical Tax Issues for Sugar Mills: Decades-old pending tax issues for sugar cooperative mills have been addressed by allowing claims on payments to sugarcane farmers for periods before the assessment year 2016-17. The Finance Act, 2023, introduced necessary amendments, supported by a Standard Operating Procedure issued by the CBDT, providing relief of nearly ₹10,000 crore.
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