New Delhi, May 21 (UNI)The Central government today conceded Haryana's demand for exempting State Agricultural Board and Market Committees from income tax and announced to make requisite amendment to the Income Tax Act.
In a communication to Haryana Chief Minister Bhupinder Singh Hooda, Prime Minister Manmohan Singh said, "I have got examined (Haryana's representation in this regard) and I am happy to share with you that the Government has decided to insert a new clause 26(AAB) in Sectiobn 10 of the Income Tax Act to provide tax exmeption to the income of an APMC constituted under the law for purpose of regualting the marketing of agricultural produce".
The Chief Minister in a respresentation to the Prime Minister on May 2, 2008 said "prior to the year 2002-03, State Marketing Board and marketing Committees were exempted from paying income tax under Section 10(20) of the Income Tax Act, 1961".
But with an amendment made in the definition of "Local Authority'' by the Finance Ministry in Finance Act, 2002, these bodies have been made to pay the taxes.
Even the proposals for tax exemption in the new Finance Bill, 2008 introduced in Parliament, do not cover these agricultural marketing bodies, the representation added.
Mr Hooda sought to remind the PM that income derived from these bodies was being used to develop infrastruture in rural areas as being done by Municipal Committees and Corporations in the urban areas.
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