National

No I-T exemption to cooperative banks: Jaitley

The government on Friday ruled out giving income tax exemption to profit-making cooperative banks saying they functioned like commercial banks and should be treated on par.

Replying to a member’s query during Question Hour in Lok Sabha, Finance Minister Arun Jaitley said 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.

Mr. 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.

A letter from the Editor


Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism
Related Topics
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | May 28, 2020 2:09:00 AM | https://www.thehindu.com/news/national/no-i-t-exemption-to-cooperative-banks-jaitley/article22324540.ece

Next Story