Notification u/s 10(46) of the Income Tax Act, 1961 in the case of Himachal Pradesh Board of School Education, Dharamshala

## Report on Notification Regarding Income Tax Exemption for Himachal Pradesh Board of School Education **1. Executive Summary:** This report analyzes a notification (S.O. 2689(E)) issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, regarding an income tax exemption under Section 10(46) of the Income-tax Act, 1961, for the Himachal Pradesh Board of School Education, Dharamshala. The notification specifies the types of income eligible for exemption and outlines conditions for maintaining this exemption. The key finding is that the Himachal Pradesh Board of School Education receives exemption on specific income streams subject to certain conditions, and this exemption is applied retrospectively for the assessment years 2020-2021 to 2023-2024. **2. Introduction:** The purpose of this report is to provide a detailed overview and analysis of Notification S.O. 2689(E), issued on June 16, 2025, concerning income tax exemption for the Himachal Pradesh Board of School Education, based solely on the information provided within the notification text. **3. Policy Overview:** This is a *new* policy notification granting specific income tax exemptions. * **Core Objective(s):** The core objective, as inferred from the text, is to grant income tax exemption under Section 10(46) of the Income-tax Act, 1961, to the Himachal Pradesh Board of School Education for specific income streams. This aims to financially support the board by reducing its tax burden on certain revenue sources. **4. Background and Rationale:** This new policy addresses the need to provide financial relief to the Himachal Pradesh Board of School Education. The likely issue the policy addresses is the taxability of the board's income, which could potentially strain its resources and impact its ability to fulfill its educational mandate. By granting an exemption, the government aims to ensure the board has sufficient funds to support its operations and educational activities. **5. Key Provisions:** This notification establishes the following key provisions: * **Exemption:** The Himachal Pradesh Board of School Education, Dharamshala, is granted an income tax exemption under Section 10(46) of the Income-tax Act, 1961 (43 of 1961), for specific income. * **Eligible Income:** The following types of income are eligible for exemption: * Grants/advances/receipts received from the State Government of Himachal Pradesh. * Fees/charges levied/received as per the Himachal Pradesh Board of School Education Act, 1968. * Receipts/income from the sale of books and other educational material. * Interest on bank deposits. * **Conditions:** The exemption is subject to the following conditions: * The 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 year. * The Board shall file a return of income in accordance with clause (g) of subsection (4C) of Section 139 of the Income-tax Act, 1961. * **Retrospective Application:** The notification is deemed to have applied for the assessment years 2020-2021 to 2023-2024, relevant for the financial years 2019-2020 to 2022-2023 respectively. **6. Target Audience and Stakeholders:** The primary target audience is the Himachal Pradesh Board of School Education, Dharamshala. Secondary stakeholders include the State Government of Himachal Pradesh (as a provider of grants), the Department of Revenue, the Central Board of Direct Taxes, and potentially banks where the Board holds deposits. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Central Board of Direct Taxes (CBDT) is the responsible agency for issuing the notification. The Himachal Pradesh Board of School Education is responsible for adhering to the conditions outlined in the notification, including filing income tax returns and ensuring compliance with the no commercial activity clause. * **Timelines or procedures:** The notification is effective from June 16, 2025, and applies retrospectively to assessment years 2020-2021 to 2023-2024. The Board is required to file income tax returns as per the Income-tax Act, 1961. **8. Expected Outcomes / Impact of Changes:** The intended outcome of this policy is to reduce the tax burden on the Himachal Pradesh Board of School Education, allowing it to allocate more resources towards educational activities. The retrospective application suggests the government aims to retroactively address any tax liabilities that may have arisen during the assessment years 2020-2021 to 2023-2024. The exemption is expected to improve the financial stability of the board and its ability to deliver quality education. **9. Conclusion:** Notification S.O. 2689(E) grants a significant income tax exemption to the Himachal Pradesh Board of School Education, Dharamshala, for specific income streams, subject to certain conditions. This policy is significant as it aims to financially strengthen the board and enhance its capacity to serve its educational mandate. The retrospective application further emphasizes the government's intention to provide comprehensive financial support to the institution.

Key Entities Referenced