To provide a level playing field between cooperative societies and companies, tax proposals for co-operative societies have attempted to rationalization the IT provisions to promote the co-operative growth, including reduction of Alternate Minimum Tax (AMT) from 18.5% to 15% and reduction of Surcharge from 12% to 7% in the cases with total income of more than Rs 1 crore but up to Rs 10 crores, vide Clauses 29 and 30 of the Finance Bill 2022 (budget 2022-23), as under:
1. Section 115JC of the Act, inter alia, provides for the alternate minimum tax (AMT) payable by co-operative societies, which is at the rate of 18.5%. However, vide the Taxation Laws (Amendment) Act, 2019, the Minimum Alternate Tax (MAT) rate for companies has been reduced to 15%. Therefore, in order to provide parity between co-operative societies and companies, it is proposed to modify sub-section (4) of section 115JC to reduce the AMT rate at which co-operative societies are liable to pay income-tax to 15%. Consequential amendment is also proposed in clause (b) of section 115JF in relation to the definition of “alternate minimum tax”.
2. These amendments will take effect from 1st April, 2023 and will accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years.