CBDT exempts NCCL settlement fund from tax
CBDT grants tax exemption to NCCL’s Core Settlement Guarantee Fund for 2019‑20 to 2026‑27, ensuring continued tax benefits under the new Income‑Tax Act.Summary
The Central Board of Direct Taxes (CBDT) announced that the Core Settlement Guarantee Fund (CSGF) of National Commodity Clearing Ltd (NCCL) will receive income‑tax exemption for the assessment years 2019‑20 through 2026‑27. The exemption, issued under the transition provisions of the new Income‑Tax Act, allows the fund to continue enjoying tax relief as long as it files returns and NCCL remains recognised as a clearing corporation by the Securities and Exchange Board of India (SEBI). Settlement guarantee funds serve as a financial buffer to ensure market trades are completed even if a member defaults; because they are created to safeguard the market rather than generate profit, their income has traditionally been exempt from tax. The notification removes uncertainty over the tax treatment of NCCL’s fund following the shift to the new law.
(Source：The Economic Times)