Union Budget 2026–27: Tax Relief and Dividend Benefits for Cooperative Societies
Sitharaman proposed a three-year exemption on dividend income received by a notified national cooperative federation...
The Union Budget 2026–27 has proposed several incentives for primary cooperative societies, according to an official release from the Finance Ministry.
Presenting the Budget in Parliament on Sunday, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman proposed to extend the deduction allowed to a primary cooperative society for the supply of cattle feed and cotton seed produced by its members.
Currently, deductions are allowed to primary cooperative societies engaged in supplying milk, oilseeds, fruits, or vegetables raised or grown by their members, the release said.
The Finance Minister also proposed allowing inter-cooperative society dividend income as a deduction under the new tax regime, to the extent it is further distributed to members.
As an additional measure to support national cooperative federations, Sitharaman proposed a three-year exemption on dividend income received by a notified national cooperative federation from its investments in companies up to January 31, 2026. This exemption would apply only to dividends that are further distributed to its member cooperatives.
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