The Finance ministry of India has announced that it will be exempting the UIDAI from taxes for 5 years till 2027-28.
What Is The UIDAI?
The UIDAI which is basically the Unique Identification Authority of India was established back in the year 2016 and it works closely with the GOI. It works under the Ministry of Electronics and Information technology (MeitY).
It is a statutory body which implies that it is created by law and hence by an act in the Parliament of the country.
What Does It Do?
This organization, headquartered in New Delhi, is primarily concerned with collecting biometric and demographic data and issuing Unique Identification Numbers to the residents of India. This is known as Aadhar, a 12 digit unique number. It helps in efficient governance and policy making at the national and state levels too.
What Is The New Notification?
Today, a notification was issued by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance. The notification communicated the UIDAI would be now exempted from taxes for the five upcoming years.
What Does It Mean For The UIDAI?
All the grants, subsidies, fees, authentication and updation charges, etc, will now not be taxed. The interest earned on bank deposits by the UIDAI will also be tax free now.
However, this announcement and the subsequent exemption will hold good only as long as the UIDAI does not engage in any kind of commercial activities. The way it earns its income and revenue must not undergo any changes in the coming years for the exemption to be effective.
