New Delhi Dec 29 (IANS) Ruling out income tax exemption for cooperative banks Finance Minister Arun Jaitley on Friday said they were no different from commercial banks and were therefore required to be treated at par with them.
"Most of these banks are providing standard banking facilities like opening of letters of credit bill discounting and collection lockers and safe deposit vaults bank guarantees.
"Many of these deal in foreign exchange and have also opened ATM kiosks. These banks are thus no different from commercial banks and therefore are required to be treated at par with them " Jaitley said in response to a question in the Lok Sabha.
He said that cooperative banks function like any other commercial bank and the principle of mutuality which was central to granting exemption did not apply "because their area of operations extends even to non-members".
"Income-tax is a tax on profits and there is no rationale for exempting profit-making cooperative banks from payment of income-tax " he said.
--IANS
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