No IT exemption to cooperative banks: govt tells Lok Sabha
Jaitley said most of these banks provided standard banking facilities like opening of letters of credit, bill discounting and collection, lockers and safe deposit vaults and bank guarantees.
The government today ruled out giving income tax exemption to profit-making cooperative banks saying they functioned like commercial banks and should be treated on par.
Finance Minister Arun Jaitley said in Lok Sabha that the cooperative banks functioned like any other commercial bank and the principle of mutuality, which is central to granting exemption under Section 80P of the Income Tax Act, does not apply to them because their area of operations extends even to non-members.
"Income tax is a tax on profits and there is no rationale for exempting profit-making cooperative banks from payment of income tax," he said during Question Hour.
Jaitley said most of these banks provided standard banking facilities like opening of letters of credit, bill discounting and collection, lockers and safe deposit vaults and bank guarantees.
"These banks are thus no different from commercial banks and therefore are required to be treated at par with them," he said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
SIP+SWP: Rs 10,000 monthly SIP for 20 years, Rs 25 lakh lump sum investment, then Rs 2.15 lakh monthly income for 25 years; see expert calculations
Retirement Planning: Investment Rs 20 lakh, retirement corpus goal Rs 3.40 crore; know how you can achieve it
Top 7 Mutual Funds With Highest Returns in 10 Years: Rs 10 lakh investment in No 1 scheme has turned into Rs 79,46,160 in 10 years
Tamil Nadu Weather Alert: Chennai may receive heavy rains; IMD issues yellow & orange alerts in these districts
SBI Senior Citizen FD Rate: Here's what State Bank of India giving on 1-year, 3-year, 5-year fixed deposits currently
Fundamental picks by brokerage: These 3 largecap, 2 midcap stocks can give up to 28% return - Check targets
01:27 PM IST