NEW DELHI, FEBRUARY 01, 2026: The Union Budget 2026-27 has announced several measures to strengthen and support primary cooperative societies. Presenting the Budget in Parliament today, Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, highlighted new provisions aimed at enhancing the cooperative sector’s role in the economy.
– Deduction for Supply of Cattle Feed and Cotton Seed:
The Finance Minister proposed to extend the existing deduction available to primary cooperative societies. In addition to milk, oilseeds, fruits, and vegetables supplied by members, deductions will now also be allowed for cattle feed and cottonseed produced by members of such societies.
– Inter-Cooperative Dividend Income Deduction:
Under the new taxation regime, dividend income earned by one cooperative society from another will be allowed as a deduction, provided it is further distributed to its members.
– Exemption for National Cooperative Federations:
To further support National Cooperative Federations, the Budget proposes a three-year exemption for dividend income received by notified federations on investments made in companies up to 31st January 2026. This exemption will apply only to dividends that are subsequently distributed to member cooperatives.
These measures reflect the Government’s continued commitment to empowering cooperatives and strengthening their contribution to inclusive growth.
