UCBs may intensify agitation to protest imposition of Income Tax

Ahmedabad, May 12 (UNI) Gujarat Urban Cooperative Banks Federation (GUCBF) claimed that all the 300-odd UCBs in the state remained closed today in protest against withdrawal of Income Tax exemption under Section 80 (P).

GUCBF president Dollar Kotecha told UNI that according to reports reaching here UCBs in other states also observed token strike as bankers staged a rally at Azad Maidan in Mumbai.

Reacting to Union Finance Minister P Chidambaram's statement in Lok Sabha today to even refusing to reconsider his decision, Mr Kotecha said the UCBs would be forced to intensify the agitation.

National Federation of Urban Cooperative Banks (NAFCUB), which has given the call for today's strike, will meet soon to decide future course of action.

Commenting on Mr Chidamabaram's argument that I-T would be imposed only on profit-making UCBs, Mr Kotecha said that they have objection to the very concept of taxing cooperative banks as they do not enjoy many benefits that commercial banks in private or public sector enjoy.

Mr Chidamabarm's action smacks of prejudice against UCBs in his preference for foreign banks. If the Centre went ahead with the measure, it would sure sound the death knell for the UCBs, he said.

Moreover, he said, the withdrawal of the exemption would fetch the government hardly about Rs 450 crore from all over the country, which would be a peanut when compared to the Centre's total tax kitty.

On the contrary, snatching away one-third of the pre-provisioning profit as tax would dealt severe blow to a sector with a wide base of SMEs in the tiny sector, he said.

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