UCBs to intensify protest for IT imposition
Ahmedabad, May 12: Irritated by Union Finance Minister P Chidambram's assertation that the Government has no plans to revisit the Income Tax issue of Urban Cooperative Banks, Gujarat Urban Cooperative Banks Federation (GUCBF) today announced to intensify its agitation further with the claim that the day long strike in cooperative banks was total.
All the 300-odd UCBs in the state remained closed today in protest against withdrawal of Income Tax exemption under Section 80 (P).
Reacting to Mr Chidambaram's statement, GUCBF President Mr Dollar Kotecha told sources that the UCBs would be forced to intensify the agitation and the National Federation of Urban Cooperative Banks (NAFCUB), the apex body, will meet soon to decide the future course of action.
A day long strike of Urban cooperative banks was being observed in the state at the call of NAFCUB.
The issue of imposition of Income tax was also raised in the Lok Sabha today but the Finance Minister said there was no proposal to review the decision of withdrawing the benefit under Section 80 (p) of the Income Tax Act available to cooperative banks.
A number of representations have been received from cooperative banks, requesting restoration of the tax benefit under Section 80(P) of the Income Tax Act as it stood before amendment.
The Finance Minister said the amendment was applicable to only 2 per cent of the 2,284 cooperative banking institutions.
''Since the tax has to be paid only by the profit-making banks, the withdrawal of the exemption will be applicable only to 1,682 banks as per the latest figures,'' the Minister told the Parliament.
MR Kotecha said according to reports reaching here, UCBs in other states also observed token strike as bankers staged a rally at Azad Maidan in Mumbai.
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, he said adding that If the Centre went ahead with the measure, it would sure sound the death knell for the UCBs.
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 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 render severe blow to a tiny sector with a wide base of SMEs, he said.