New Delhi, Feb 7 (UNI) National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB) today said it has submitted a memorandum to President Pratibha Patil for restoration of tax exemption to cooperative banks.
NAFCUB president Vijaya Kumar and chief executive D Sharma explained to the President that majority of the countries world over had a policy of not taxing income of cooperative credit institutions for the reason that the extra surplus left in hands of these institutions enables them to lend mainly to underprivileged section of the society.
Other than retained surplus, the cooperative banks had no avenues of raising share capital from capital markets, NAFCUB said in a statement.
It was pointed out that very few cooperative banks were large enough to make any significant contribution by way of income tax, because majority of them are small banks.
The entire collection of income tax from cooperative banks may not exceed even one per cent of the total direct tax revenues, it was pointed out.
UNI MP BJR DB2114