The government on Wednesday announced a three-year tax exemption on dividend income for national cooperative federations, a move aimed at benefiting small members and strengthening the cooperative sector.
Finance Minister Nirmala Sitharaman said in the Lok Sabha that the tax relief will help boost incomes of small cooperative members and encourage greater participation in the sector.
FM Sitharaman stressed that cooperatives, along with micro, small and medium enterprises (MSMEs) and farmers, play a key role in creating jobs and supporting economic growth in the country.
Speaking during the discussion on the Finance Bill, FM Sitharaman said empowering MSMEs, farmers and cooperatives is essential for inclusive development.
"These sectors form the backbone of India's economy, especially in rural areas, and help generate employment across industries and regions," Finance Minister Sitharaman noted.
The finance minister also highlighted a new provision in the Finance Bill related to data centre services.
Under the safe harbour rule, resident Indian companies providing such services to related foreign entities will be allowed a 15 per cent margin on costs.
"This will ensure that operations in India remain genuine and profitable, while discouraging the creation of shell entities with no real business activity," FM Sitharaman stated.
Addressing concerns over government finances, the finance minister said that in some cases, the Centre has spent more than it collected through cess and surcharges, indicating that funds are being directed towards public welfare.
FM Sitharaman further announced that penalties for technical defaults will now be converted into fixed fees.
"This step is expected to reduce uncertainty for businesses and make compliance simpler," FM Sitharaman stated.
In another measure, the government has rationalised passenger allowances to reduce disputes at airports, making the process smoother for travellers.
The finance minister said the measures are aimed at strengthening key sectors, improving ease of doing business, and ensuring that economic growth benefits a wider section of society.
(With inputs from IANS)
