The Central Board of Direct Taxes (CBDT)in an official notification has notified that “The Insolvency and Bankruptcy Board of India shall be eligible for the income tax exemption under clause (46) of section 10 of the Income-tax Act, 1961.” The exemptions would include the grants-in-aid received from the Central Government, the fees and fines received under the Insolvency and Bankruptcy Code, 2016, and interest income accrued by the Insolvency and Bankruptcy Board of India.
Although certain conditions have to be fulfilled in order to claim the exemptions. Firstly, the Insolvency and Bankruptcy Board of India shall not engage in any commercial activity. Secondly, activities and the nature of the specified income shall remain unchanged throughout the financial years.
Thirdly, the Insolvency and Bankruptcy Board of India shall file a return of income in accordance with the provisions of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
Section 10(46) of the Income Tax Act,
“any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called) which—
(a) has been established or constituted by or under a Central, State or Provincial Act, or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;
(b) is not engaged in any commercial activity; and
(c) is notified by the Central Government in the Official Gazette.”