The Ministry of Finance, through Notification No. 42/2024, has enacted provisions under section 10(46) of the Income Tax Act, 1961, pertaining to the Tamil Nadu Electricity Regulatory Commission. This notification outlines the specific incomes exempted from taxation for the Commission and sets forth the conditions for availing such exemptions.
Detailed Analysis:
1. Scope of Notification: The notification identifies the Tamil Nadu Electricity Regulatory Commission as a body constituted by the Government of Tamil Nadu, eligible for income tax exemption under clause (46) of section 10. It specifies four categories of income exempted, including government grants, certain fees and penalties under the Electricity Act, 2003, and interest earned on bank deposits.
2. Conditions for Exemption: To qualify for the exemption, the Commission must adhere to certain conditions. Firstly, it must refrain from engaging in any commercial activity. Additionally, the nature of its activities and the specified incomes must remain unchanged throughout the financial years. Moreover, the Commission is required to file a return of income as per the provisions of the Income Tax Act, 1961.
3. Retrospective Application: The notification elucidates that its provisions shall apply retrospectively for assessment years 2018-2019 to 2022-2023, corresponding to the financial years 2017-2018 to 2021-2022. This retrospective application ensures consistency and clarity in tax treatment for the specified period.
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MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 42/2024-Income Tax | Dated: 8th May, 2024
S.O. 1965(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, ‘Tamil Nadu Electricity Regulatory Commission’ (PAN AAAGT0048J), a body constituted by the Government of Tamil Nadu, in respect of the following specified income arising to that Commission, namely:
(a) Government Grants;
(b) fees levied under clause (g) of sub-section (1) of Section 86 read with Section 181 of the Electricity Act, 2003;
(c) penalties levied u/s 146 of the Electricity Act, 2003; and
(d) Interest earned on bank deposits.
2. This notification shall be effective subject to the conditions that Tamil Nadu Electricity Regulatory Commission-
(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 assessment years 2018-2019, 2019-2020, 2020- 2021, 2021-2022 and 2022-2023 relevant for the financial years 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 respectively.
[Notification No. 42/2024 F. No. 300196/40/2019-ITA-I]
CASTRO JAYAPRAKASH T., Under Secy.
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect to this notification.
