CBDT grants Income Tax Exemption to Andhra Pradesh and Puducherry Building and Other Construction Workers Welfare Board [Read Notification]

The Central Board of Direct Taxes (CBDT) has granted income tax exemption under Section 10(46) of the Income Tax Act, 1961 to the Andhra Pradesh Building and Other Construction Workers Welfare Board and the Puducherry Building and Other Construction Workers Welfare Board.

The respective notifications, issued on 22nd July 2025, were published in the Gazette of India and are applicable for specified financial years.

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According to the notifications, both Boards are exempted from income tax on the following sources of income: (a) Cess received from the construction industry, (b) Registration and renewal fees collected from building and construction workers, and (c) Interest earned on bank deposits. These incomes, being directly linked to welfare activities, qualify for exemption under the Act.

The Andhra Pradesh Board, constituted by the State Government, will enjoy exemption benefits for Assessment Years 2019-20 to 2023-24, corresponding to Financial Years 2018-19 to 2022-23.

Meanwhile, the Puducherry Board, constituted by the Union Territory administration, has been granted exemption for Assessment Years 2024-25 to 2028-29, applicable for Financial Years 2023-24 to 2027-28.

However, the exemptions are subject to specific conditions. Both Boards must refrain from engaging in any commercial activity. Moreover, the nature of income and activities must remain unchanged, and they are required to file income tax returns under the provisions of Section 139(4C)(g) of the Income-tax Act, 1961.

The government has clarified through explanatory memoranda that the retrospective effect of the notifications will not adversely affect any taxpayer.

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