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 Section 393(4) of the Act specifies certain situations where tax is not required to be deducted at source under the corresponding provisions of the Income-tax Act, 1961. However, the existing framewor
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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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