Introduction: The Ministry of Finance, through the Central Board of Direct Taxes, has issued Notification No. 7/2024 on Income Tax, dated 5th January, 2024. This notification grants tax exemptions to ‘Karmayogi Bharat,’ a Company incorporated under Section 8 of the Companies Act, 2013, with 100% equity shared owned by the President of India.
Detailed Analysis: The notification specifies the types of income eligible for exemption, including grants/subsidies, various fees, and interest earned. However, stringent conditions accompany this tax exemption. Karmayogi Bharat is restricted from engaging in any commercial activity, and the nature of specified income must remain consistent throughout the financial years.
Furthermore, the company is required to file a return of income following the provisions of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961. The effective period of this notification is for assessment years 2024-2025 to 2028-2029, corresponding to the financial years 2023-2024 to 2027-2028.
Conclusion: This significant move by the Ministry of Finance aims to encourage and support Karmayogi Bharat’s activities, focusing on grants, subsidies, fees, and interest income. However, the strict conditions imposed ensure that the company adheres to non-commercial activities and maintains the nature of its specified income. This article provides a comprehensive understanding of the implications of Notification No. 7/2024, shedding light on the regulatory landscape and its impact on Karmayogi Bharat.
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MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 7/2024-Income Tax |Dated: 5th January, 2024
S.O. 79(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, ‘Karmayogi Bharat (PAN: AAJCK2949L), a Company incorporated under Section 8 of the Companies Act, 2013 with 100% equity shared owned by the President of India i.e. Government of India, in respect of the following specified income arising to the said Company, as follows:
(a) Grants/subsidies received from the Government/ Government bodies;
(b) Subscription Charges/Fees, Assessment fees, On boarding fees;
(c) Receipts from sale of forms, materials, disposal of scrap and tender fee; and
(d) Interest earned from Banks and Government Securities and Bonds.
2. This notification shall be effective subject to the conditions that Karmayogi Bharat –
(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 years 2024-2025, 2025-2026, 2026-2027, 2027-2028 and 2028-2029 relevant for the financial years 2023-2024, 2024-2025, 2025-2026, 2026-2027 and 2027-2028 respectively.
[Notification No. 7/2024 F. No. 196/12/2023-ITA-I]
VIKAS SINGH, Director (ITA-I)
