Centre today ruled out giving income tax exemption to profit-making cooperative banks saying they functioned like commercial banks and should be treated on par. <br/><br/>Replying to supplementaries during Question Hour in the Lok Sabha, Finance minister Arun Jaitley said the cooperative banks functioned like any other commercial bank and the principle of mutuality, which is central to granting exemption of the Income Tax Act, does not apply to them because their area of operations extends even to non-members. <br/><br/>He said, Income tax is a tax on profits and there is no rationale for exempting profit-making cooperative banks from payment of income tax. <br/><br/>The Minister said most of these banks provided standard banking facilities like opening of letters of credit, bill discounting and collection, lockers and safe deposit vaults and bank guarantees. <br/><br/>He added that these banks are thus no different from commercial banks and therefore are required to be treated at par with them.<br/>