The Central Board of Direct Taxes (CBDT) today issued revised list of entities which are exempted from payment of TDS.
The present circular changes the earlier circulars issued in 2002 and 2015 which exempted the payment of TDS for the payment towards entities whose income is unconditionally exempt under section 10 of the Income Tax Act and who are also statutorily not required to file return of income as per Section 139 of the Act.
As per the circulars, there would be no requirement for tax deduction at source (TDS) from the payments made to them since their income is anyway exempted from tax under the Act. The issue of whether exemption from TDS can be extended to more entities on these principles and whether the exemption is needed to be withdrawn in respect of some of the exempted entities was examined by the Board.
The Board decided to extend the TDS exemption to more eligible entities and to withdraw the exemption in respect of some of the exempted entities.
In view of the above, a revised list of entities exempted from TDS has been drawn by adding entities in the first category listed above to the entities mentioned in Circular No. 4/2002 and Circular No. 7/2015 and removing entities in second and third categories from the list of existing entities eligible for exemption from TDS.
The present circular exempts local authorities, Regimental Fund or Non-public Fund established by the armed forces of the Union, Fund set up LIC, authorities mentioned in 23BB and 23BBA of the Act, SAARC Fund for Regional Projects set up by Colombo Declaration, Central Electricity Regulatory Commission, IRDA, Prasar Bharati, PM’s National Relief Fund, Recognized PF, Approved Superannuation and Gratuity Funds, ESI Fund, Agricultural Produce Marketing Committee, Corporation, body, institution or association established for promoting interests of members of Scheduled Castes or ScheduIed Tribes or backward classes, Corporation established for promoting interests of members of a minority community, Corporation established for welfare and economic upliftment of ex-servicemen, New Pension System Trust.
Read the full text of the Circular below.
