Central Government has granted certain exemptions under Income Tax Act to Dairy Cooperative Societies to Boost the Sector
In a significant move aimed at supporting the dairy sector, the Government has introduced a series of measures granting income tax exemptions and reductions for Cooperative Societies under the Income Tax Act. The announcement was made by the Union Minister of Fisheries, Animal Husbandry & Dairying, Shri Parshottam Rupala, in a written reply in Lok Sabha.
Key Highlights of the announcement include: — Deduction under Section 80P: Primary cooperative societies involved in the supply of milk to the Federal Cooperative Society can now claim deductions for their entire profit related to milk supply to Union societies under Section 80P of the Income Tax Act, 1961.
Surcharge Reduction: The surcharge on cooperative societies has been reduced from 12% to 7% for incomes exceeding ₹1 crore and up to ₹10 crores.
Alternate Minimum Tax Reduction: The rate of Alternate Minimum Tax for cooperative societies has been lowered from 18.5% to 15%, aligning it with the rate applicable to companies.
Amendment to Section 269T: Amendment to Section 269T now ensures that no penal consequences arise for cash repayments by Primary Agricultural Credit Societies ( PACS ) or Agricultural and Rural Development Banks ( PCARDB ) if the amount is less than ₹2 lakh, up from the previous ₹20,000 limit.
Enhanced TDS Limit: Co-operative societies now enjoy a higher threshold of ₹3 crore for TDS on cash withdrawal, compared to the ₹1 crore limit applicable to other recipients under section 194N.
Interest Subvention for Farmers: The government is offering interest subvention on short-term crop loans up to ₹3 lakh for farmers, at an attractive rate of 7% per annum. Prompt repayments attract an additional 3% interest subvention, bringing the effective rate of interest down to 4%.
Kisan Credit Card ( KCC ) Scheme: Since 2018-19, the government has introduced the Kisan Credit Card ( KCC ) scheme for Animal Husbandry and Fisheries, providing short-term working capital loans up to ₹2 lakh per beneficiary, aligning them with short-term crop loans.
Minister Rupala emphasized that these measures aim to provide a substantial boost to the dairy sector and promote the financial well-being of cooperative societies involved in dairy activities.
Source : TAxscan By Manu SharmaÂ
