CBDT Grants Income Tax Exemption to Key Public Bodies

CBDT Grants Income Tax Exemption to Key Public Bodies

The Central Board of Direct Taxes (CBDT) has issued notifications to grant income tax exemptions to several key public and governmental bodies, recognizing their objectives as non-profit and aligned with public welfare.

Purpose of the Exemption

• Non-Taxable Income: The notifications formally declare that the income of these specified institutions will be exempt from income tax.
• Encouraging Public Service: This exemption is typically granted under specific sections of the Income Tax Act (like Section 10) to institutions that are primarily established for scientific research, education, public utility, or other non-commercial, statutory, and charitable purposes.
• Statutory Compliance: The issuance of these notifications ensures that the designated bodies comply with the necessary legal formalities required to benefit from tax-exempt status under the Income Tax Act.

Impact

The move provides significant financial relief to these public bodies, enabling them to reinvest their entire income and resources into fulfilling their core public mandates without being subject to corporate or income tax liabilities.