CBDT Issues Tax Exemption Notifications for Karnataka Workers’ Welfare Board and Credit Guarantee Fund Trust for Animal Husbandry & Dairying

The Central Board of Direct Taxes (CBDT) has issued two key notifications, both dated August 22, 2025  under Section 10(46) of the Income-tax Act, 1961, granting income tax exemptions to specific government-established entities for defined income streams.

Notification No. 138/2025 – Karnataka State Building & Other Construction Workers’ Welfare Board

• Entity Covered: Karnataka State Building & Other Construction Workers’ Welfare Board (PAN: AAALK0820C), constituted by the Government of Karnataka.
• Exempt Income Sources:
  1. Grants received from the Central Government.
  2. Sums received from other sources decided by the Central Government.
  3. Cess collected under Section 3(1) of the Building and Other Construction Workers’ Welfare Cess Act, 1996.
  4. Registration fees and annual subscriptions from establishments.
  5. Interest earned on bank deposits.
• Validity: Applicable for AY 2026-27 to AY 2030-31, i.e., for FY 2025-26 to FY 2029-30.
• Conditions:

• • The Board must not engage in commercial activities.
  • Nature of specified income must remain unchanged.
  • Must file income tax returns under Section 139(4C)(g).

Notification No. 139/2025 – Credit Guarantee Fund Trust for Animal Husbandry & Dairying

• Entity Covered: Credit Guarantee Fund Trust for Animal Husbandry and Dairying (PAN: AACTC8610N), constituted by the Government of India under the Atma Nirbhar Bharat Abhiyan stimulus package.
• Exempt Income Sources:
  1. Guarantee fees from Eligible Lending Institutions (ELIs).
  2. Income from mutual funds.
  3. Miscellaneous income.
  4. Interest income from banks/financial institutions.
• Validity:

• • Deemed applicable from AY 2025-26 (FY 2024-25).
  • Further applicable for AYs 2026-27 to 2029-30 (FYs 2025-26 to 2028-29).

• Conditions:

• • No engagement in commercial activities.
  • Specified income sources to remain unchanged.
  • Must file returns as per Section 139(4C)(g).

Key Takeaway

These notifications provide income tax relief to statutory welfare boards and trusts by ensuring their welfare-related income remains exempt, so long as they:

• Stay non-commercial in nature,
• Maintain consistency in income sources, and
• File returns as mandated by the Income-tax Act.

The move is expected to support construction workers’ welfare schemes in Karnataka and strengthen credit access for animal husbandry and dairy sectors under the government’s self-reliance initiative.

The Notifications can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/08/Notification-No.-138-139_2025.pdf