The Ministry of Finance has issued Notification No. 62/2023, dated 16th August 2023, detailing specific tax exemptions for the ‘Urban Improvement Trust Udaipur.’ The notification comes after an Order from the Hon’ble High Court of Rajasthan and outlines the specified income eligible for exemption under Section 10 of the Income-tax Act, 1961. It also describes the conditions that the Trust must meet to avail of these exemptions.
Analysis:
The notification focuses on the tax exemptions conferred upon the Urban Improvement Trust Udaipur for the following specified incomes:
(a) Grants from the State Government. (b) Proceeds from the disposal of land, buildings, and other properties. (c) Rent/lease income from land, buildings, and other properties. (d) Fees, interest, or other charges under the Rajasthan Urban Improvement Trust Act, 1959. (e) Interest earned on (a) to (d) above. (f) Interest on Loans from the State Government.
The notification sets out three critical conditions for the Trust:
- It must not engage in any commercial activity.
- The activities and nature of the specified income must remain unchanged during the financial years.
- The Trust must file a return of income as per the relevant clause of the Income-tax Act.
Additionally, the notification is deemed to have been applied retrospectively for assessment years 2013-2014 to 2017-18. This retrospective effect comes in line with the High Court Order concerning the Trust and is certified not to adversely affect any person.
Conclusion:
Notification No. 62/2023 serves as an essential directive providing tax exemptions to the Urban Improvement Trust Udaipur. By specifying the conditions and types of income eligible for exemption, the notification brings clarity to the Trust’s tax obligations. The retrospective application ensures alignment with the legal directives and reinforces the Trust’s status and obligations under the law.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 62/2023-Income Tax | Dated: 16th August, 2023
S.O. 3666(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Urban Improvement Trust Udaipur’, (PAN AAALU0072E), a Trust constituted by the State Government of Rajasthan, in respect of the following specified income arising to that Trust, namely:-
(a) Grants received from the State Government;
(b) Moneys received from the disposal of land, building and other properties;
(c) Moneys received by way of rent/lease of land, building and other properties;
(d) Moneys received by way of fees, interest or any other charges received under the Rajasthan Urban Improvement Trust Act, 1959;
(e) Interest earned on (a) to (d) above; and
(f) Interest on Loans received from the State Government.
2. This notification shall be effective subject to the conditions that Urban Improvement Trust Udaipur,-
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and
(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
3. This notification shall be deemed to have been applied for the assessment years 2013-2014, 2014-2015, 2015- 2016, 2016-2017 and 2017-2018 relevant to the financial years 2012-2013, 2013-2014, 2014-2015, 2015-2016 and 2016-2017 respectively.
[Notification No. 62/2023/F. No. 300196/2/2023-ITA-I]
VIKAS SINGH, Director, ITA-I
Explanatory Memorandum
This notification shall be given retrospective effect for the assessment years 2013-2014 to 2017-18 relevant to the financial years 2012-2013 to 2016-2017, respectively, in view of the Order of the Hon’ble High Court of Judicature for Rajasthan at Jodhpur in matter of Urban Improvement Trust, Udaipur V. Union of India and Anr. in [D.B. Writ Petition (Civil) No.1004 of 2016], dated 21st of April, 2023. It is certified that no person is being adversely affected by giving retrospective effect to this notification.
