income tax

Tax Exemption Details for Gujarat Water Supply and Sewerage Board: Notification No. 108/2024

Overview of Income Tax Notification No. 108/2024: Tax Exemption for Gujarat Water Supply and Sewerage Board

On October 11, 2024, the Central Board of Direct Taxes (CBDT) issued Notification No. 108/2024 under Section 10(46) of the Income Tax Act, 1961. This notification grants tax exemptions to the Gujarat Water Supply and Sewerage Board (GWSSB) located in Gandhinagar. The exemption applies to the following categories of income:

  • Government grants
  • Water charges
  • Centage
  • Pension contributions
  • Other income as defined under the Gujarat Water Supply and Sewerage Board Act, 1978
  • Investigation charges
  • Rental income
  • Interest accrued from bank deposits

Conditions for Tax Exemption

For GWSSB to qualify for the tax exemption, it must adhere to the following conditions:

  1. GWSSB must not engage in any commercial activities.
  2. The income sources must remain consistent.
  3. GWSSB is obligated to file income returns according to Section 139(4C)(g) of the Income Tax Act.

Scope of the Notification

The notification is effective retroactively for the assessment years 2022-2023 and 2023-2024 and will also apply prospectively for the assessment years 2024-2025 through 2026-2027. This encompasses the financial years from 2021 to 2026. The relevant income includes:

  • Grants from Government, Local Bodies, and other Government Agencies
  • Centage at rates specified by the Gujarat Water Supply and Sewerage Board Act, 1978 or the Government of Gujarat
  • Water charges (tariffs established by the Government of Gujarat) collected from local bodies, village panchayats, or industries
  • Contributions received toward pension and gratuity
  • Additional incomes, including investigation charges, hire charges, sale of tender schedules, and rent per the Gujarat Water Supply and Sewerage Board Act, 1978
  • Interest earned from bank deposits

Conditions for Applicability

The notification's provisions will remain effective provided that GWSSB fulfills the following criteria:

  1. GWSSB refrains from conducting any commercial activities.
  2. The nature of specified income is maintained throughout the financial years.
  3. Income returns are filed in compliance with the provisions of clause (g) of sub-section (4C) of Section 139 of the Income Tax Act.