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

## Report on Notification S.O. 2827(E) Regarding Himachal Pradesh Computerization of Police Society **1. Executive Summary:** This report analyzes Notification S.O. 2827(E), issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes on July 14, 2021. This notification pertains to the Himachal Pradesh Computerization of Police Society and grants it an exemption from income tax under clause 46 of section 10 of the Income-tax Act, 1961, specifically for Grant-in-aid and interest accrued on it. Key conditions are attached to this exemption, including restrictions on commercial activity and requirements for filing income tax returns and audit reports. The notification is applied retrospectively to financial years 2018-2019, 2019-2020, and 2020-2021, and prospectively to 2021-2022 and 2022-2023. **2. Introduction:** The purpose of this report is to provide an informative overview of Notification S.O. 2827(E), concerning the Himachal Pradesh Computerization of Police Society, based solely on the text of the notification itself. This analysis aims to clarify the scope, conditions, and implications of the notification. **3. Policy Overview:** This is a *new policy* granting income tax exemption to the Himachal Pradesh Computerization of Police Society. * **Core Objective(s):** The primary objective, inferred from the text, is to provide financial assistance and support to the Himachal Pradesh Computerization of Police Society by exempting specific income sources from income tax under Section 10(46) of the Income-tax Act, 1961. **4. Background and Rationale:** * Since this is a new policy, the inferred problem it addresses is likely the financial burden on the Himachal Pradesh Computerization of Police Society. By granting tax exemption on Grant-in-aid and the interest it generates, the government aims to alleviate financial constraints and potentially enable the society to better fulfill its objectives related to the computerization of police services in Himachal Pradesh. The exemption also suggests that the government recognizes the societal value of the society's work. **5. Key Provisions / Changes:** Since this is a new policy, the key provisions are as follows: * **Tax Exemption:** The notification grants an exemption from income tax to the Himachal Pradesh Computerization of Police Society on: * Amount received in the form of Grant-in-aid. * Interest accrued on Grant-in-aid deposited in the Society's account. * **Conditions for Exemption:** The exemption is subject to the following conditions: * The society shall not engage in any commercial activity. * The activities and the nature of the specified income shall remain unchanged throughout the financial years. * The society must file its income tax return in accordance with clause (g) of subsection (4C) of section 139 of the Income-tax Act, 1961. * The society must file an audit report along with the return, duly verified by an accountant as per section 288(2) of the Income-tax Act, 1961, and include a certificate from a chartered accountant confirming that the conditions are satisfied. * **Period of Applicability:** The notification applies retrospectively for the financial years 2018-2019, 2019-2020, and 2020-2021 and prospectively for the financial years 2021-2022 and 2022-2023. **6. Target Audience and Stakeholders:** The primary target audience is the Himachal Pradesh Computerization of Police Society. Other stakeholders include: * The State Government of Himachal Pradesh (as the establishing body). * The Central Board of Direct Taxes (as the issuing authority). * Chartered Accountants responsible for auditing and certifying compliance. * The Income Tax Department (responsible for processing returns). **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Central Board of Direct Taxes (CBDT) is responsible for issuing the notification. The Himachal Pradesh Computerization of Police Society is responsible for complying with the conditions outlined in the notification. The Income Tax Department is responsible for administering and enforcing the provisions of the Income-tax Act, 1961. * **Timelines/procedures:** The notification specifies that the society must file its income tax returns and audit reports annually, as per the Income-tax Act, 1961. The audit report must be verified by an accountant and accompanied by a certificate from a chartered accountant confirming compliance with the conditions. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of this policy are: * Reduced tax burden on the Himachal Pradesh Computerization of Police Society. * Increased financial resources available to the society for its activities related to police computerization. * Improved efficiency and effectiveness of police services in Himachal Pradesh through enhanced computerization efforts (indirectly). * Greater transparency and accountability through the requirement of filing income tax returns and audit reports. **9. Conclusion:** Notification S.O. 2827(E) provides a significant financial benefit to the Himachal Pradesh Computerization of Police Society by granting income tax exemption on Grant-in-aid and the interest earned on it. This exemption is conditional upon the society's adherence to specific requirements, including restrictions on commercial activities and compliance with tax filing and audit obligations. The notification demonstrates the government's support for initiatives aimed at improving police services through computerization and highlights the importance of transparency and accountability in the management of public funds.

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