Centre Grants Income Tax Exemptions to Credit Guarantee Fund Trust for Animal Husbandry and Karnataka Construction Workers’ Welfare Board [Read Notification]

The Central Board of Direct Taxes (CBDT), Ministry of Finance, issued Notification No. 138/2025 and Notification No. 139/2025, both dated 22 August 2025, granting income tax exemptions under Section 10(46) of the Income-tax Act, 1961 to two welfare-oriented bodies: the Karnataka State Building and Other Construction Workers’ Welfare Board and the Credit Guarantee Fund Trust for Animal Husbandry and Dairying.

Under Notification No. 138/2025, the Karnataka State Building and Other Construction Workers’ Welfare Board, constituted by the State Government, has been exempted from paying income tax on specific categories of income.

These include grants received from the Central Government, amounts received from approved sources, the cess collected on construction costs under the Building and Other Construction Workers’ Welfare Cess Act, 1996, registration fees and annual subscriptions from establishments, and interest earned on bank deposits.

The exemption will apply for Assessment Years 2026-27 to 2030-31 (covering financial years 2025-26 to 2029-30).

Under Notification No. 139/2025, the Credit Guarantee Fund Trust for Animal Husbandry and Dairying, established under the Department of Animal Husbandry and Dairying, Government of India, has been granted exemption from income tax on certain types of income.

These include guarantee fees received from lending institutions, income from mutual funds, miscellaneous income, and interest earned from banks and financial institutions. This exemption will be valid for Assessment Years 2025-26 to 2029-30 (covering financial years 2024-25 to 2028-29).

In both cases, the CBDT has laid down conditions for availing the exemption. The entities must ensure that their activities remain non-commercial in nature, that the character of income does not change during the exemption period, and that they continue to file their income tax returns under Section 139(4C) of the Income-tax Act.

These exemptions recognize the welfare role of such organizations. The Karnataka Board is primarily engaged in collecting and utilizing cess and fees for the benefit of construction workers and the Credit Guarantee Fund Trust supports credit flow in the animal husbandry and dairy sector by providing guarantee cover to banks.

By exempting their incomes, the government ensures that more funds remain available for welfare and developmental activities rather than being diverted towards tax payments.

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