1Research Scholar, Dept. of Studies & Research in Commerce, Tumkur University, Tumkur
2Associate Professor, Dept. of P.G. Studies in MBA, Visvesvaraya Technological University, Jnanasangam, Belgaum
Online published on 11 December, 2015.
Income Tax Department has introduced the provision of TDS deduction on the Interest of Fixed Deposits of Co-Operative Banks in the Financial Budget of 2015–16. As Union Budget 2015 presented by Finance Minister Arun Jaitley has made amendment to Section 19A of Income Tax Act, 1961 w.e.f June 1, 2015, which stated that the exemption from TDS on payment of interest to members by co-operative societies and banks would be withdrawn. Through this, the Government will collect more Taxes and Tax Evasion will be avoided. It may be one of tool to garner revenue.
There are many Co-operative Banks in function all over India from Small Towns to Big Cities. Persons of every hierarchy in the society have Accounts in the Co-operative Banks. Generally, due to no TDS deduction and more Interest Rate on Deposits in Co-operative banks than the Nationalized Banks, many prefer deposits in the Co-operative Banks in rural areas. But due to this stringent provision of TDS, Cooperative Banks and Depositors have to face the change. The present research paper focuses on impact of changes in TDS provisions on depositors and Co-operative banks.
