Karnataka Urban Water Supply and Drainage Board exempted from Income Tax u/s 10(46) : CBDT [Read Notification]

The Central Board of Direct Taxes (CBDT), vide notification no.S.O. 1000(E)  dated 1st March, 2024 has notified the income tax exemption to the “Karnataka Urban Water Supply and Drainage Board”, under section 10(46) of the Income-tax Act, 1961.

The following income are exempted from the income tax:

1. Establishment, administrative, supervision, water charges and rent collected as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974);
2. Forfeiture of earnest money deposit as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974);
3. Penalty, Sale of Scrap, Storage charges and Survey charges as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974) and
4. Interest earned on bank deposits.

However, this notification shall be effective subject to the conditions that Karnataka Urban Water Supply and Drainage Board  –

1. shall not engage in any commercial activity;
2. activities and the nature of the specified income shall remain unchanged throughout the financial years; and
3. 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.

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