New Delhi, Feb 1 (PTI) Finance Minister Nirmala Sitharaman on Sunday announced a slew of tax benefits for the cooperative sector entities engaged in the supply of cattle feed and cotton seed.
Currently,
deduction of profit and gains is allowed to a primary cooperative society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to a federal cooperative society and others engaged in the same activities.
"I propose to extend this deduction to also include the supply of cattle feed and cotton seed produced by its members," Sitharaman said.
The government will allow inter-cooperative society dividend income as a deduction under the new tax regime to the extent it is further distributed to its members.
The dividend received by a cooperative society from another cooperative society is allowed as a deduction in the old tax regime.
Non-allowance of this deduction in the new tax regime may result in double taxation, as it may be taxed in the hands of the members on further distribution by the cooperative societies.
The government will also allow an exemption for a period of three years to dividend income received by a notified national cooperative federation on their investments made in companies up to January 31, 2026.
"This exemption would be allowed only for dividends further distributed to its member cooperatives," she added.
In the case of cooperative societies, the rates of income tax will remain unchanged at 10 per cent up to Rs 10,000; 20 per cent between Rs 10,001 to Rs 20,000; and 30 per cent when income exceeds Rs 20,000. PTI LUX DRR
