Introduction: The Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, has issued Notification No. 2/2024- Income Tax on January 2, 2024. This notification pertains to the taxation aspects of the ‘Karnataka State Rural Livelihood Promotion Society.’
Detailed Analysis: The notification, empowered by clause (46) of section 10 of the Income-tax Act, 1961, highlights that the Karnataka State Rural Livelihood Promotion Society, a body constituted by the Government of Karnataka (PAN AACAK0581H), is now eligible for specific income exemptions. The specified income includes grants received from the Central Government, grants from the State Government of Karnataka, and interest earned on bank deposits.
To enjoy the benefits outlined in the notification, the Karnataka State Rural Livelihood Promotion Society must adhere to certain conditions. It should refrain from engaging in any commercial activity, maintain the nature of its activities and specified income unchanged throughout financial years, and file a return of income as per the provisions of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
Furthermore, the notification applies retrospectively for assessment years 2019-2020 to 2023-2024, relevant for the financial years 2018-2019 to 2022-2023.
Conclusion: In conclusion, the Income Tax Notification No. 2/2024 sheds light on the tax implications for the Karnataka State Rural Livelihood Promotion Society. It opens avenues for exemptions on specific incomes, provided the society complies with the stipulated conditions. This move, deemed effective retrospectively, aims to streamline the taxation aspects for the mentioned assessment years, ensuring clarity and adherence to regulatory requirements. The detailed analysis unveils the intricacies of the notification, offering stakeholders valuable insights into the taxation framework governing such entities.
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MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 2/2024- Income Tax | Dated: 2nd January, 2024
S.O. 41(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, ‘Karnataka State Rural Livelihood Promotion Society’ (PAN AACAK0581H), a body constituted by the Government of Karnataka, in respect of the following specified income arising to the said body namely, as follows:
(a) Grants received from the Central Government;
(b) Grants received from the State Government of Karnataka; and
(c) Interest earned on bank deposits.
2. This notification shall be effective subject to the conditions that Karnataka State Rural Livelihood Promotion Society –
(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 2019-2020, 2020-2021, 2021-2022, 2022-2023 and 2023-2024 relevant for the financial years 2018-2019, 2019-2020, 2020-2021, 2021-2022 and 2022-2023 respectively.
[Notification No. 2/2024/ F. No. 300196/20/2019-ITA-I]
VIKAS SINGH, Director (ITA-I)
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect to this notification.
