Budget 2022: Tax relief for cooperative sector, Rs 900 crore for Ministry of Cooperation

“Currently, cooperative societies are required to pay alternate minimum tax at the rate of 18.5 per cent. However, companies pay the same at the rate of 15 per cent. To provide a level playing field between co-operative societies and companies, I propose to reduce this rate for the cooperative societies also to fifteen per cent,” Sitharaman said in her budget speech.

The minister also announced a reduction in surcharge on cooperative societies from 12 per cent to 7 per cent.

“I also propose to reduce the surcharge on cooperative societies from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores,” she said.

“This would help in enhancing the income of cooperative societies and its members who are mostly from rural and farming communities,” the minister said.

Besides tax relief to cooperative societies, Sitharaman has allocated Rs 900 crore for the newly created Ministry of Cooperation for the financial year 2022-23. Out of this, an amount of Rs 350 crore has been allocated for the Digitalisation of Primary Agriculture Cooperative Societies and Rs 274 crore for Prosperity through Cooperatives– two centrally sponsored schemes of the ministry.

The government had created a separate Ministry of Cooperation in July last year and Home Minister Amit Shah became the first minister of cooperation. Shah has announced that his ministry will soon bring out a new cooperative policy. The existing national policy on cooperatives was brought in March 2002 by the then NDA government.