Income Tax Act 1961 Section 10(46) Notification for DMF Trust

Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, New Delhi, has issued Notification No. 86/2023-Income Tax dated 4th October 2023, under Section 10(46) of the Income Tax Act, 1961. This notification pertains to the classification of ‘District Mineral Foundation Trusts’ (DMF Trusts) as a specific class of Authority for tax purposes.

Section 10(46) of the Income Tax Act, 1961, empowers the Central Government to notify certain entities as a ‘class of Authority’ for specific income sources. In this case, DMF Trusts have been included in this classification. The following income sources arising to DMF Trusts are now covered under this notification:

• Contribution by lease Holder to DMF as per the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015.
• Interest received from lease holders for late payment.
• Any Penalty charged to lease holder.
• Income from Interest on fund available under DMF.
• Interest received on Saving Bank Accounts.
• Interest received on Excess Fund invested in Term Deposit.

However, several conditions must be met for this notification to be effective:

• Each DMF Trust should not engage in any commercial activity.
• The activities and the nature of the specified income should remain unchanged throughout the financial years.
• DMF Trusts should file a return of income in accordance with the provisions of clause (g) of sub-section (4C) of section 139 of the Income Tax Act, 1961.

This notification is deemed to have been applied for the assessment year 2023-2024, relevant to the financial year 2022-2023, and will be applicable for assessment years 2024-2025 to 2027-2028 relevant to financial years 2023-2024 to 2026-2027 for the Trusts mentioned in the provided schedule.

Conclusion: The notification under Section 10(46) of the Income Tax Act, 1961, is significant for DMF Trusts as it clarifies their tax classification and the income sources covered. It is essential for DMF Trusts to adhere to the specified conditions to avail of the benefits outlined in the notification. The comprehensive list of DMF Trusts mentioned in the schedule ensures transparency and compliance across various states in India.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi

Notification No. 86/2023-Income Tax | Dated: 4th October, 2023

S.O. 4342(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, ‘District Mineral Foundation Trust’ as specified in the schedule to this notification, constituted by Government in exercise of powers conferred under section 9(B) of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (10 of 2015) as a ‘class of Authority’, in respect of the following specified income arising to that Authority, namely :-

(a) Contribution by lease Holder to DMF as per the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015;

(b) Interest received from lease holders for late payment;

(c) Any Penalty charged to lease holder;

(d) Income from Interest on fund available under DMF;

(e) Interest received on Saving Bank Accounts; and

(f) Interest received on Excess Fund invested in Term Deposit.

2. This notification shall be effective subject to the conditions that each of the District Mineral Foundation Trust-

(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 year 2023-2024 relevant to financial year 2022-2023 and shall be applicable for assessment years 2024-2025 to 2027-2028 relevant to financial years 2023-2024 to 2026-2027 in respect of Trusts mentioned in column (2) of the below mentioned schedule.

SCHEDULE

[Notification No. 86/2023 F.No.300196/36/2017-ITA-I(Pt.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.