surat cooperative banks in south gujarat play a crucial role in the rural economy of the region as they provide finance at low rate to small businessmen thus the proposal of union budget 202021 to reduce tax on cooperative societies to 22 per cent from 30 per cent will help banks in cooperative sector a great dealsurat district cooperative bank sdcb with annual business of about rs8300 crore earns a profit of approximately rs85 crore in 201920 it paid tax at the rate of 30 per cent which amounts to rs21 crore in the new financial year with the same profit it needs to pay only rs20 crore as taxsdcb director dilip bhakta said yes there will be some benefit because of tax reduction but it remains to be seen how much exempting cooperative societies from alternative minimum tax amt is a good step but the amount of benefit is not enough will these help create a level playing field for cooperative banks vis vis the private sector financial institutions it is highly doubtful sdcb chairman naresh patel said we welcome reduction in tax but increase in depositor insured amount from rs1 lakh to rs5 lakh will make us pay higher premium to deposit insurance and credit guarantee corporation this will eat away whatever we will save from reduction in tax if a bank saves rs2 crore tax but has to pay rs25 crore in premium for depositors assured money it is like giving from one hand and taking away from another a cooperative bank officer said sv chaudhary managing director of sumul dairy said things are not clear but will be once notification comes at present full rebate is given to business of a cooperative society with another full tax rebate was given under amt for such transactions there is no benefit now why should cooperatives opt for 22 per cent tax regime when they dont pay anything under 30 per cent structure with all deductions and rebates