The Ministry of Finance, through a notification from the Central Board of Direct Taxes, has granted an income tax exemption to the Karnataka State Building & Other Construction Workers’ Welfare Board. This exemption, effective from the assessment year 2026-2027 to 2030-2031, applies to several specific sources of income. These include grants from the Central Government, certain other government-decided funds, cess collected on construction costs, and fees from establishments. Additionally, interest earned on bank deposits is also exempt. The tax relief is conditional: the board must not engage in any commercial activity, its income sources and activities must remain consistent, and it must file its income tax returns as required by law. This measure, notified under Section 10(46) of the Income-tax Act, 1961, ensures the board’s specified income is not taxed, provided it adheres to the stipulated rules. The notification also includes an explanatory memorandum stating that the retrospective effect of this notification does not adversely affect any person.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 138/2025-Income Tax| Dated: 22st August, 2025
S.O. 3853(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 Building & Other Construction Workers’ Welfare Board” (PAN AAALK0820C)’, a board constituted by Government of Karnataka, in respect of the following specified income arising to the said board, as follows:
(a) Grants received from the Central Government;
(b) Sums received from such other sources decided by the Central Government;
(c) Cess collected on construction cost levied u/s 3(1) of the Building and Other Construction Worders’ Welfare Cess Act, 1996;
(d) Registration fee and annual subscriptions received from the establishments; and
(e) Interest earned on bank deposits.
2. This notification shall be effective subject to the conditions that ‘Karnataka Building & Other Construction Workers’ Welfare Board’
(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 applicable for assessment year 2026-2027 to 2030-2031 relevant to financial year 2025-2026 to 2029-2030.
[Notification No. 138 /2025/F. No. 300196/87/2024-ITA-I]
MEENAKSHI SINGH, Dy. Secy.
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect to this notification
