Tax neutrality for co-op bank move to small fin bank

In a move that will smoothen voluntar y transition of cooperative banks into banking companies, the budget has provided tax neutrality for the transition of an urban cooperative bank into a small finance bank. An urban cooperative bank will not be required to pay capital gains for assets transferred to a small finance bank. As per the Memorandum Explaining the Provisions in the Finance Bill, this change will be effective from April, with allotment of shares of the co-operative bank to its shareholders during a transition to a small finance bank not being treated as a transfer.