Income Tax Relief to Cooperative Societies

Current Context: The Indian government has been progressively providing income tax relief to cooperative societies to promote their growth and development.

• These measures aim to strengthen the cooperative sector and contribute to the overall economic growth of the country.
• Here are some of the significant income tax reliefs extended to cooperative societies in recent years:
• Reduced Alternate Minimum Tax (AMT) rate: The AMT rate for cooperative societies was brought down from 18.5% to 15%, aligning it with the rate applicable to companies.
• Lower surcharge: The surcharge on cooperative societies with income between ₹1 crore and ₹10 crore was reduced from 12% to 7%.
• The concessional tax rate for new manufacturing cooperative societies: New cooperative societies starting manufacturing activities before a specified deadline can avail a lower tax rate of 15%, similar to new manufacturing companies.
• Relief for sugar cooperatives: Sugar cooperatives were allowed to claim payments made to sugarcane farmers as expenditure for a specific period, providing significant tax relief.
• Increased cash withdrawal limit without TDS: The cash withdrawal limit for cooperative societies without deduction of tax at source (TDS) was increased from ₹1 crore to ₹3 crore per year.

Question:

1 What was the reduced Alternate Minimum Tax (AMT) rate for cooperative societies?

• A) 18.5%
• B) 15%
• C) 12%
• D) 10%

Answer: B) The AMT rate for cooperative societies was brought down from 18.5% to 15%, aligning it with the rate applicable to companies.