7/2008, Dated: August 1, 2008
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.
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 u/s.
10(26 BBB) 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 organizations from their statutory obligations of deducting TDS on
all contractual payments made by them to other parties including sub-contractors
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.