Rationalization of provisions of the Act to promote the growth of co-operative societies

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.

[Clauses 29 and 30]

Alternate Minimum Tax parity: co operative societies' AMT rate aligned with companies, lowering their AMT burden from the prior higher rate. The Finance Bill proposes amending section 115JC(4) to reduce the alternate minimum tax rate applicable to co operative societies to the company rate and consequentially amending the definition of alternate minimum tax in clause (b) of section 115JF, effective from 1st April, 2023 for the assessment year 2023 24 onwards.