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Unit 4: Exemptions and Deductions - I

concession order. Annual value of the entire building is exempt even though a portion Notes
only is occupied by the ruler
29. Income of local authorities [Section 10(20)]: The income of a local authority which is
chargeable under the head ‘Income from house property’, ‘Capital gains’ or ‘Income from
other sources’ or even from a trade or business carried on by it which accrues or arises
from the supply of commodities or services (other than water or electricity) within its
own jurisdictional area or from the supply of water or electricity within or outside its own
jurisdictional area would be wholly exempt from income-tax.
30. Pension fund of LIC [Section 10(23AAB)]: The Income of the Life Insurance Corporation of
India or any other insurer to the extent it is from a fund set up under a pension scheme to
which contribution is made by any person for receiving pension from such fund is exempt
from tax provided the pension scheme is approved by the Controller of Insurance or the
Insurance Regulatory and Development Authority established under Sub-section (1) of
Section 3 of the Insurance Regulatory and Development Authority Act, 1999, as the case
may be.
31. Income of research associations [Section 10(21)]: Any income of a Research Association,
approved for the purposes of Section 35(1)(ii)(iii) shall be exempt from tax if the Research
Association applies its income or accumulates it for application, wholly and exclusively,
to the objects for which it is established and the provisions of Section 11(2) and (3) shall be
applicable to such accumulations with due adaptations for the purposes of scientific research
or research in social science or statistical research and it does not invest or deposit its
funds, other than:

(a) any assets held by the research association where such assets form part of the corpus
of the fund of the association as on the first day of June, 1973;
(b) any assets (being debentures issued by or on behalf of, any company or corporation)
acquired by the research association before the 1st day of March, 1983;
(c) any accretion to the shares forming part of the corpus of the fund mentioned by way
of bonus shares allotted to the research association;
(d) voluntary contribution received and maintained in the form of jewellery, furniture
or any other article as the Board may by notification in the official gazette, specify,
for any period during the previous year otherwise than in the forms and modes as
specified in Section 11(5).

However, the exemption under this clause shall not be denied in relation to voluntary
contribution, other than voluntary contribution in cash or voluntary contribution of the
nature referred to (a), (b), (c) and (d) above, subject to condition that such voluntary
contribution is held by the research association only in the forms or modes as specified in
Section 11(5) after the expiry of one year from the end of the previous year in which such
asset is acquired or the 31st day of March, 1992 whichever is later.
Further, the exemption under this clause to any profits and gains of business carried on by
the research association shall be available if the business is incidental to the attainment of
its objectives and separate books of account are maintained in respect of such business.

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Caution The exemption under this clause shall be withdrawn if the Central Government is
satisfied that the conditions are not being fulfilled but an opportunity of being heard shall
be provided.

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