CBDT exempts Specified Income of Kerala Toddy Workers Welfare Fund from Taxation [Read Notification]

The Central Board of Direct Taxes (CBDT) has issued a notification exempting the specified income of the Kerala Toddy Workers Welfare Fund Board from income taxation under Section 10(46) of the Income-tax Act, 1961. The exemption is effective retrospectively from the assessment year 2022-23 and will continue through assessment year 2026-27.

The Kerala Toddy Workers Welfare Fund Board, constituted under state legislation, is dedicated to the welfare of toddy workers in Kerala. Its primary source of income includes contributions collected under the Kerala Toddy Workers Welfare Fund Act, contributions from its members, and interest earned on bank deposits. The CBDT’s exemption covers all such sums received by the Board, acknowledging its non-commercial and public welfare objectives.

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According to the notification, the Board must adhere to certain conditions to maintain this tax-exempt status. It must refrain from engaging in any commercial activities and ensure that the nature of its income and operations remain consistent during the exempted financial years. Additionally, the Board is required to file its income tax returns in accordance with the specific provisions laid out under the Income-tax Act. This compliance ensures transparency and accountability in the Board’s financial affairs.

The exemption aims to strengthen the Board’s ability to deliver social security and welfare benefits to the toddy workers, a community involved in the traditional tapping and selling of toddy, a locally significant agricultural product. By removing the tax burden on its income, the government enables the Board to utilize more resources directly for the welfare and development of toddy workers.

By granting this exemption, the CBDT recognizes the Kerala Toddy Workers Welfare Fund Board as an entity working for the socio-economic upliftment of a vital segment of the workforce, thereby reinforcing the government’s commitment to inclusive growth.

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