Amendment of section 44DB.
13. In section 44DB of the Income-tax Act,──
(a) in sub-section (3), after the words “successor co-operative bank”, the words “or to the converted banking company” shall be inserted;
(b) in sub-section (4), after the words “a successor co-operative bank”, and the words “the successor co-operative bank” the words “or to a converted banking company” and the words “or to the converted banking company” shall, respectively, be inserted;
(c) in sub-section (5),––
(i) after clause (c), the following clause shall be inserted, namely:––
‘(ca) "banking company" shall have the meaning assigned to it in clause (c) of section 5 of Banking Regulation Act, 1949 (10 of 1949);’;.
(ii) in clause (d), after the words “a co-operative bank”, the words “or conversion of a primary co-operative bank” shall be inserted;
(iii) after clause (d), the following clauses shall be inserted, namely:––
‘(da) “conversion” means transition of a primary co-operative bank to a banking company under the scheme of the Reserve Bank of India as notified vide its circular number DCBR. CO. LS. PCB. Cir. No. 5/07.01.000/2018-19, dated the 27th September, 2018;
(db) “converted banking company” means a banking company formed as a result of conversion from primary co-operative bank;’.;
(iv) in clause (h), after the words “the demerged co-operative bank”, the words “or the primary co-operative bank which has been succeeded as a result of conversion” shall be inserted;
(v) after clause (h), the following clause shall be inserted, namely:––
‘(ha) “primary co-operative bank” shall have the meaning assigned to it in clause (ccv) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);’.
Notes on Clauses:
Clause 13 of the Bill seeks to amend section 44DB of the Income-tax Act relating to special provision for computing deductions in the case of business reorganisation of cooperative banks.
The said section, inter alia, provides that where business reorganisation of co-operative banks takes place, the deductions under section 32, 35D, 35DD and 35DDA shall be apportioned between the predecessor co-operative bank and the successor co-operative bank in the proportion of the number of days before and after the date of business reorganisation.
It is proposed to expand the scope of the said section so as to include conversion of a primary co-operative bank to a banking company under its ambit.
It is also proposed to define the expressions “banking company”, “converted banking company”, “conversion” and “primary co-operative bank” and to make consequential amendment to the definition of “predecessor co-operative bank”.
These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years.
