In exercise of the powers conferred by clause 46 of section 10 of the Income tax Act

## Report on Notification Regarding Income Tax Exemption for Haryana Labour Welfare Board **1. Executive Summary:** This report analyzes a notification issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes on July 14, 2021. The notification grants income tax exemption under clause 46 of section 10 of the Income-tax Act, 1961 to the Haryana Labour Welfare Board concerning specific income sources. The report details the scope of the exemption, the conditions attached to it, and the period for which the exemption is applicable. Key findings indicate a focus on supporting the financial operations of the Haryana Labour Welfare Board while ensuring transparency and adherence to regulatory standards. **2. Introduction:** This report aims to provide a comprehensive overview of Notification No. 80/2021, issued by the Central Board of Direct Taxes, based solely on the text of the notification itself. The report will analyze the notification's purpose, scope, conditions, and implications for the Haryana Labour Welfare Board. **3. Policy Overview:** This is a *new* policy granting an exemption. * **Core Objective(s):** The core objective, as inferred from the text, is to provide income tax exemption to the Haryana Labour Welfare Board on specified income, thereby supporting its operations related to labour welfare activities within the state. This encouragement of labour welfare activities is the implied objective. **4. Background and Rationale:** * **Background and Rationale (New Policy):** The notification addresses the need to financially support and incentivize the operations of the Haryana Labour Welfare Board. By granting income tax exemption, the Central Government aims to facilitate the Board's activities in providing welfare services to labourers in Haryana. The specific types of income listed suggest a focus on supporting the Board's revenue streams related to employer/employee contributions, unclaimed funds, interest on loans, and investments. **5. Key Provisions / Changes (New Policy):** The notification outlines the following key provisions: * **Exemption Grant:** The Haryana Labour Welfare Board is granted an exemption from income tax under clause 46 of section 10 of the Income-tax Act, 1961. * **Specified Income:** The exemption applies to the following income sources: * Contribution to the Labour Welfare Fund by the Employers and Employees. * Unpaid accumulation which were due to employees but not paid to them within a period of 2 years by the Employer. * Fine on delayed deposit of contribution and unpaid accumulation. * Interest on loans and advances given to staff of the board. * Interest income received from investment. * **Conditions for Exemption:** The exemption is subject to the following conditions: * The Haryana Labour Welfare Board shall not engage in any commercial activity. * The Board's activities and the nature of the specified income shall remain unchanged throughout the financial years. * The Board shall file return of income in accordance with the provision of clause g of subsection 4C of section 139 of the Incometax Act, 1961. * The Board shall file the Audit report along with the Return, duly verified by the accountant as provided in explanation to section 2882 of the Incometax Act, 1961 along with a certificate from the chartered accountant that the above conditions are satisfied. * **Applicability Period:** The notification applies for the period from 01/06/2020 to 31/03/2021 in the financial year 2020-2021 and also from the financial years 2021-2022, 2022-2023, 2023-2024, and 2024-2025. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders are: * **Haryana Labour Welfare Board:** The Board is the direct beneficiary of the income tax exemption. * **Employers in Haryana:** Employers contributing to the Labour Welfare Fund are indirectly affected, as the Board's financial stability is enhanced. * **Employees in Haryana:** Employees are also indirectly affected, as the Board's ability to provide welfare services is supported. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** * Central Board of Direct Taxes (CBDT) is responsible for issuing and administering the notification. * Haryana Labour Welfare Board is responsible for complying with the conditions of the exemption, including filing returns and audit reports. * **Timelines/Procedures:** * The notification specifies the period for which the exemption is applicable (01/06/2020 to 31/03/2021 and financial years 2021-2022 to 2024-2025). * The Haryana Labour Welfare Board must file returns of income and audit reports in accordance with the Income-tax Act, 1961. **8. Expected Outcomes / Impact of Changes (New Policy):** * The expected outcomes of this notification include: * Enhanced financial stability for the Haryana Labour Welfare Board. * Increased availability of funds for labour welfare activities in Haryana. * Greater transparency and accountability in the Board's financial operations. * Potentially more effective labour welfare programs due to increased financial resources. **9. Conclusion:** Notification No. 80/2021 provides a significant income tax exemption to the Haryana Labour Welfare Board, aimed at supporting its labour welfare activities. The exemption is subject to specific conditions related to commercial activities, income nature, and compliance with reporting requirements. This notification is likely to have a positive impact on the Board's financial health and its ability to serve the welfare needs of labourers in Haryana. The details in this report are based solely on the text of the notification itself and should be considered within that context.

Key Entities Referenced