New Delhi: Finance Minister Nirmala Sitharaman said the government has decided to give concessional tax rate to co-operative societies and also raised the audit threshold for Micro, Small & Medium Enterprises (MSME) from Rs 1 crore to Rs 5 crore.
The Finance Minister said, “Co-operative societies play an extremely important role in our economy in facilitating access to credit, procurement of inputs and marketing of products to their members.”
The cooperatives are currently taxed at a rate of 30 per cent with surcharge and cess.
“As a major concession and in order to bring parity between the co-operative societies and corporates, I propose to provide an option to co-operative societies to be taxed at 22 per cent plus 10 per cent surcharge and 4 per cent cess with no exemption/deductions”, said the Finance Minister.
She also proposed to exempt these co-operative societies from Alternative Minimum Tax (AMT) just like companies under the new tax regime are exempted.
In a major relief for the MSME sector, the FM said, “In order to reduce the compliance burden on small retailers, traders, shopkeepers who comprise the MSME sector, I propose to raise by five times the turnover threshold for audit from the existing 1 crore to 5 crore.”
Currently, businesses having turnover of more than one crore rupees are required to get their books of accounts audited by an accountant. The FM added, “Further, in order to boost less cash economy, I propose that the increased limit shall apply only to those businesses which carry out less than 5 per cent of their business transactions in cash.”
The FM also announced concession in real estate transaction.
Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in real estate, if the consideration value is less than the circle rate by more than 5 per cent, the difference is counted as income both in the hands of the purchaser and seller.
“In order to minimize hardship in real estate transaction and provide relief to the sector, I propose to increase the limit of 5 per cent to 10 per cent”, said the FM.