CIRCULAR NO. 7/2008, DATED 1-8-2008, Order under section 119
Order under section 119(1) of the Income-tax Act, 1961 regarding exemption from the TDS provisions under section 197 read in conjunction with section 10(26BBB) of Income-tax Act, 1961
CIRCULAR NO. 7/2008, DATED 1-8-2008
In exercise of the powers conferred under sub-section (1) of section 119 of Income-tax Act, 1961, Central Board of Direct Taxes hereby directs that corporations which are established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen and whose income qualifies for exemption from income-tax under section 10(26BBB) of the Income-tax Act, 1961, are hereby given exemption from Tax Deduction/Collection at Source on their receipts.
2. This exemption shall not absolve such organisation from their statutory obligation of deducting TDS on all contractual payments made by them to other parties including sub-contractors etc.
3. This exemption shall be valid for 3 years from the date of issue of this order.
4. After the end of 3 years, all the Chief Commissioners of Income-tax will send their feedback to the CBDT on the benefits and, or shortcomings observed in the working so as to enable a review and further decision by the Board in the matter.