Approved gratuity funds - exemption u/s 10(25) - Income Tax - 579/CBDT

INSTRUCTION NO. 579/CBDT Dated : August 1, 1973 Section(s) Referred: 10(25) Statute: Income - Tax Act, 1961 It is stated that it is only by an amendment made by Finance Act, 1973 in section 10(25) that income of approved Gratuity Funds has been granted exemption with effect from 1st April, 1973. Prior to 1973-74 such income was not exempt. In this connection a reference is invited to para 51(C) of C. A.G.'s report for the year 1970-71 wherein it is pointed out that exemption of the interest income of Gratuity Funds from investment has been allowed on the mere analogy that such income of Provident Funds and Superannuation Funds is exempt u/s 10(25) of the Income-tax Act, 1961. This was not in conformity with the Law as it then stood. 2. Board desires that all the case of gratuity funds may be reviewed upto assessment year 1972-73 with a view to find out whether in cases of such Funds any income from interest or any other source has been exempted. A list of funds which have been allowed exemption prior to the amendment made to section 10(25) in respect of such income must be sent along with the details of action taken to retrieve the loss of revenue, by 25th August 1973, positively.