CBDT’s Revised List of TDS Exempt Entities which are Exempt from Tax/ ITR Filing

Exemption from TDS Requirement in the case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961; Revised List notified by CBDT

TDS Exemption for certain Tax Exempt Entities: CBDT Circular No. 18/2017 dt. 29 May 2017

CBDT had issued Circulars No. 4/2002 dt. 16 July 2002 and 7/2015 dt. 23 Apr. 2015 prescribing TDS exemption (i.e. no TDS applicable) in respect of payments made to certain tax exempt entities (u/s 10) which are also exempt from ITR filing (u/s 139).

List of such notified entities, which are exempt from TDS, has been reviewed/ revised by the CBDT and name of various entities have been removed/ added based on criteria of tax exemption and ITR filing exemption, as under:

i) Entities that meet both conditions but are not mentioned in the aforesaid Circulars need to be included in the list of TDS exempted entities.

ii) Entities that are mentioned in Circular No. 4/2002 but their exemption from income tax has since been withdrawn need to be removed from the list of TDS exempted entities.

iii) Entities that are mentioned in Circular No. 4/2002 but because of subsequent amendment they are now required to mandatorily file their returns of income u/s 139 need to be removed from the list of TDS exempted entities.

Accordingly, CBDT has notified revised list of TDS Exempt entities (funds or authorities or Boards or bodies, by whatever name called) which are eligible for unconditional tax exemption u/s 10 as well as ITR filing exemption u/s 139, in view of the fact that income of these entities is anyway exempt under the IT Act, as under:

(i) “local authority”, as referred to in the Explanation to clause (20);

(ii) Regimental Fund or Non-public Fund established by the armed forces of the Union referred to in clause (23AA);

(iii) Fund, by whatever name called, set up by the Life lnsurance Corporation of India on or after 1st August, 1996, or by any other insurer referred to in clause (23AAB);

(iv) Authority (whether known as the Khadi and Village Industries Board or by any other name) referred to in clause (23BB);

(v) Body or authority referred to in clause (23BBA);

(vi) SAARC Fund for Regional Projects set up by Colombo Declaration referred to in clause (23BBC);

(vii) lnsurance Regulatory and Development Authority referred to in clause (23BBE);

(viii) Central Electricity Regulatory Commission referred to in clause (23BBG);

(ix) Prasar Bharati referred to in clause (23BBH);

(x) Prime Minister’s National Relief Fund referred to in sub-clause (i), Prime Minister’s Fund (Promotion of Folk Art) referred to in sub-clause (ii), Prime Minister’s Aid to Students Fund referred to in sub-clause (iii), National Foundation for Communal Harmony referred to in sub-clause (iiia), Swachh Bharat Kosh referred to in sub-clause (iiiaa), Clean Ganga Fund referred to in sub-clause (iiiaaa) of clause (23C);

(xi) Provident fund to which the Provident Funds Act, 1925 (19 of 1925) referred to in sub-clause (i), recognized provident fund referred to in sub-clause (ii), approved superannuation funds referred to in sub-clause (iii), approved gratuity fund referred to in sub-clause (iv) and funds referred to in sub-clause (v) of clause (25);

(xii) Employees’ State Insurance Fund referred to in clause (25A);

(xiii) Agricultural Produce Marketing Committee referred to in clause (26AAB);

(xiv) Corporation, body, institution or association established for promoting interests of members of Scheduled Castes or ScheduIed Tribes or backward classes referred to in clause (26B);

(xv) Corporation established for promoting interests of members of a minority community referred to in clause (26BB);

(xvi) Corporation established for welfare and economic upliftment of ex-servicemen referred to in clause (26BBB);

(xvii) New Pension System Trust referred to in clause (44).

It may be noted that this circular supersedes earlier circulars No. 4/2002 dt. 16 July 2002 and 7/2015 dt. 23 Apr. 2015 issued by the CBDT on the issue, with effect from the date of issue of this Circular.

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