Karnataka - Gulbarga   

Cooperative societies oppose move to impose tax on profits

Gulbarga: Members of the Karnataka State Cooperative Credit Societies and the Karnataka State Souharda Sahakari Samyukta Mandal have opposed the draft Bill that proposes to impose an income tax of 33 per cent on the profits made by the credit societies and souharda banks.

Gurunath Jhansikar, Secretary of the Karnataka State Cooperative Credit Societies and vice-president of the Karnataka State Souharda Sahakar Samyukta Mandal, told presspersons in Gulbarga on Tuesday that the Union Government has prepared a draft Bill to impose direct tax on the credit societies and souharda sahakari banks.

Mr. Jhansikar argued that the proposal to impose income tax on the profits earned by the cooperative societies and souharda banks was against the spirit of the cooperative movement in the country. The move will “eat into the vitals of the cooperative societies and souharda banks, and weaken them”. Besides that it will also reduce the dividends that the members of the cooperative institutions earn.

Mr. Jhansikar said the cooperative banks in Karnataka, Tamil Nadu, Maharashtra and New Delhi have registered their protest and urged the Centre not to go ahead with the proposal.

Mr. Jhansikar added that the State Government should amend the Karnataka State Souharda Sahakari Act so as to make provision for reduction of professional tax being collected from the employees of the souharda sahakari banks. The Government should scrap the provision in the Act according to which 2 per cent of the profit is given to the Sahakari Maha Mandal as education cess.

The Government should also initiate measures to reduce the reserve funds of the sahakari banks from the present 64 per cent to 47 per cent. And, TDS should not be collected from the Commission Agents. A memorandum listing out all the demands has been submitted to Chief Minister B.S. Yeddyurappa recently, Mr. Jhansikar said, adding that Mr. Yeddyurappa had said that their demands would be considered.

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