Quick Summary
The Government has proposed an amendment to Section 393(4) of the Income-tax Act to remove the requirement of tax deduction at source (TDS) on interest income paid to co-operative societies engaged in banking business, including co-operative land mortgage banks. What the Law Currently Provides
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FAQ :
The government proposes to remove the requirement for tax deduction at source (TDS) on interest income paid to co-operative societies engaged in the banking business.
The proposed amendment will come into force from April 1, 2026, applying from Assessment Year 2026-27 onwards.
The exemption applies to interest paid to any co-operative society engaged in the business of banking, including co-operative land mortgage banks.
The amendment aims to align the Act with the Income-tax Act, 1961, remove interpretational issues, reduce compliance burdens, and improve ease of operations for co-operative banking institutions.
No, the amendment specifically covers interest income other than interest on securities paid to co-operative societies engaged in banking.
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