The Central Board of Direct Taxes (CBDT) has notified income tax exemption for the West Bengal Building and Other Construction Workers Welfare Board under Section 10(46) of the Income-tax Act, 1961, covering specified categories of income earned by the Board.
The notification, issued by the Ministry of Finance (Department of Revenue) on January 14, 2026, recognises the Board as an eligible authority for tax exemption on income arising from welfare-related activities carried out under state legislation.
Income Covered Under the Exemption
As per the notification, the exemption applies to the following specified income of the Welfare Board:
- Cess collected under the Building and Other Construction Workers Welfare Cess Act, 1996 and the rules framed thereunder
- Registration fees and annual subscriptions collected from registered construction workers
- Grants-in-aid and loans received from the government
- Interest income earned from investments
The Board, constituted by the Government of West Bengal, holds Permanent Account Number (PAN) AAALW0061D.
Conditions Attached to the Tax Exemption
The CBDT has made the exemption subject to strict compliance with certain conditions. The Welfare Board must:
- Not engage in any commercial activity
- Ensure that its activities and nature of specified income remain unchanged during the relevant financial years
- File income tax returns in accordance with Section 139(4C)(g) of the Income-tax Act
The notification clarifies that failure to comply with these conditions may lead to penal action under the Income-tax Act and withdrawal of the exemption granted under Section 10(46).
Retrospective Applicability Clarified
The tax exemption has been granted with retrospective effect, applying to:
- Assessment Years 2022-23 to 2025-26, corresponding to Financial Years 2021-22 to 2024-25
- It will also apply prospectively to Assessment Year 2026-27, relevant to Financial Year 2025-26
The accompanying Explanatory Memorandum states that no individual or entity is adversely affected by the retrospective operation of the notification, as the benefit applies from the year in which the application was filed before the CBDT.
Significance of Section 10(46) Recognition
Section 10(46) of the Income-tax Act allows tax exemption to statutory bodies, authorities or boards established under law, provided their income arises from non-commercial, public welfare activities.
Tax experts note that such notifications provide certainty and protection to welfare boards that collect statutory levies and fees for the benefit of workers, ensuring that funds earmarked for social security and welfare are not eroded by tax liabilities.
The notification has been issued under Notification No. 7/2026 and signed by Hardeep Singh, Under Secretary, Ministry of Finance.
Official copy of the notification has been attached
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