UPSC Prelims Practice Questions — Reduction in surcharge on income tax for cooperative societies
Q1. The reduction of surcharge from 12% to 7% for co-operative societies having total income exceeding ₹1 crore but not exceeding ₹10 crore was brought about by which one of the following?
- A. Finance Act, 2020
- B. Finance Act, 2021
- C. Finance Act, 2022
- D. Finance Act, 2023
Q2. With reference to the surcharge on income tax applicable to co-operative societies, consider the following statements:
1. Prior to the reduction, co-operative societies in the ₹1 crore to ₹10 crore income slab attracted a surcharge of 12%.
2. The reduced surcharge of 7% for that slab took effect from FY 2022-23.
3. Co-operative societies with total income exceeding ₹10 crore also had their surcharge cut to 7%.
Which of the statements given above is/are correct?
- Prior to the reduction, co-operative societies in the ₹1 crore to ₹10 crore income slab attracted a surcharge of 12%.
- The reduced surcharge of 7% for that slab took effect from FY 2022-23.
- Co-operative societies with total income exceeding ₹10 crore also had their surcharge cut to 7%.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q3. With reference to the optional concessional tax regimes for domestic companies and resident co-operative societies, consider the following statements:
1. Section 115BAA gives domestic companies a concessional tax rate of 22%.
2. Section 115BAD gives resident co-operative societies a concessional tax rate of 22%.
3. Both Section 115BAA and Section 115BAD levy a flat surcharge of 12% irrespective of total income.
4. Both regimes are optional and, once opted, apply to subsequent years.
Which of the statements given above is/are NOT correct?
- Section 115BAA gives domestic companies a concessional tax rate of 22%.
- Section 115BAD gives resident co-operative societies a concessional tax rate of 22%.
- Both Section 115BAA and Section 115BAD levy a flat surcharge of 12% irrespective of total income.
- Both regimes are optional and, once opted, apply to subsequent years.
- A. 1 and 2
- B. 2 only
- C. 3 only
- D. 3 and 4
Q4. With reference to minimum-tax provisions applicable to co-operative societies and companies, consider the following statements:
1. Before the Finance Act, 2022, co-operative societies paid Alternate Minimum Tax at 18.5%, while companies paid Minimum Alternate Tax at 15%.
2. The Finance Act, 2022 reduced the AMT for co-operative societies to 15%, aligning it with the MAT rate for companies.
3. Under the optional concessional regimes, co-operative societies (Sec 115BAD) are taxed at 15%, the same flat rate as domestic companies under Sec 115BAA.
Which of the statements given above is/are correct?
- Before the Finance Act, 2022, co-operative societies paid Alternate Minimum Tax at 18.5%, while companies paid Minimum Alternate Tax at 15%.
- The Finance Act, 2022 reduced the AMT for co-operative societies to 15%, aligning it with the MAT rate for companies.
- Under the optional concessional regimes, co-operative societies (Sec 115BAD) are taxed at 15%, the same flat rate as domestic companies under Sec 115BAA.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q5. With reference to the Alternate Minimum Tax (AMT) applicable to co-operative societies, consider the following statements:
1. The AMT rate for co-operative societies was reduced from 18.5% to 15%.
2. This reduction was made by the Finance Act, 2020.
3. The reduction aligned the AMT with the minimum-tax rate applicable to companies.
4. AMT is levied on the adjusted total income of a co-operative society claiming specified deductions.
Which of the statements given above are correct?
- The AMT rate for co-operative societies was reduced from 18.5% to 15%.
- This reduction was made by the Finance Act, 2020.
- The reduction aligned the AMT with the minimum-tax rate applicable to companies.
- AMT is levied on the adjusted total income of a co-operative society claiming specified deductions.
- A. 1 and 2 only
- B. 1, 3 and 4 only
- C. 2, 3 and 4 only
- D. 1, 2, 3 and 4
Q6. The Alternate Minimum Tax (AMT), whose rate for co-operative societies was reduced to 15%, is levied under which one of the following provisions of the Income-tax Act, 1961?
- A. Section 115BAD
- B. Section 115JB
- C. Section 115JC
- D. Section 115BAE
Q7. With reference to the concessional tax regime under Section 115BAE of the Income-tax Act, consider the following statements:
1. It offers a concessional tax rate of 15% to new manufacturing co-operative societies.
2. It is available to co-operative societies engaged in any business activity, including trading and services.
3. The society must be set up and registered on or after 1 April 2023.
4. A flat surcharge of 10% applies irrespective of the society's income.
Which of the statements given above is/are NOT correct?
- It offers a concessional tax rate of 15% to new manufacturing co-operative societies.
- It is available to co-operative societies engaged in any business activity, including trading and services.
- The society must be set up and registered on or after 1 April 2023.
- A flat surcharge of 10% applies irrespective of the society's income.
- A. 2 only
- B. 2 and 4
- C. 1 and 3
- D. 3 only
Q8. With reference to Section 115BAE, consider the following statements:
1. It applies to resident co-operative societies engaged exclusively in manufacturing or production.
2. A society opting for it pays a flat surcharge of 10% irrespective of income.
3. The option is exercised in Form 10-IFA and, once exercised, cannot be withdrawn.
4. It was introduced by the Finance Act, 2020.
Which of the statements given above are correct?
- It applies to resident co-operative societies engaged exclusively in manufacturing or production.
- A society opting for it pays a flat surcharge of 10% irrespective of income.
- The option is exercised in Form 10-IFA and, once exercised, cannot be withdrawn.
- It was introduced by the Finance Act, 2020.
- A. 1, 2 and 3 only
- B. 1 and 4 only
- C. 2, 3 and 4 only
- D. 1, 2, 3 and 4
Q9. The Constitution (97th Amendment) Act, 2011 inserted Part IXB dealing with co-operative societies, comprising Articles 243ZH to 243ZT. How many Articles does Part IXB contain?
Q10. With reference to the Constitution (97th Amendment) Act, 2011, consider the following statements:
1. It inserted Article 43B in the Directive Principles of State Policy.
2. It added Part IXB dealing with the incorporation, regulation and winding up of co-operative societies.
3. The maximum number of directors on the board of a co-operative society is fixed at 21.
4. It provides for reservation of one-third of the total seats on every co-operative board for women.
Which of the statements given above is/are NOT correct?
- It inserted Article 43B in the Directive Principles of State Policy.
- It added Part IXB dealing with the incorporation, regulation and winding up of co-operative societies.
- The maximum number of directors on the board of a co-operative society is fixed at 21.
- It provides for reservation of one-third of the total seats on every co-operative board for women.
- A. 1 and 2
- B. 3 only
- C. 4 only
- D. 2 and 4
Q11. The Ministry of Cooperation, which drives the 'Sahakar se Samriddhi' vision, was carved out in 2021 from which one of the following ministries?
- A. Ministry of Rural Development
- B. Ministry of Agriculture and Farmers Welfare
- C. Ministry of Finance
- D. Ministry of Panchayati Raj
Q12. While the policy impetus for tax relief to co-operative societies is provided by the Ministry of Cooperation, the actual amendment and administration of the income-tax and surcharge rates (such as the 12%→7% surcharge cut) is carried out by which one of the following?
- A. Ministry of Cooperation, through the Central Registrar of Cooperative Societies
- B. Ministry of Finance, through the Central Board of Direct Taxes (CBDT)
- C. NITI Aayog, through its economic advisory wing
- D. Ministry of Finance, through the Central Board of Indirect Taxes and Customs (CBIC)