New Delhi: The Union Budget on Wednesday proposed removing the exemption from paying income tax by news agencies.
The Finance Bill proposes an amendment to Clause 22B of section 10 of the Income Tax Act that grants exemption to notified news agencies from paying tax on income, provided the organisation applies its income or accumulates it solely for collection and distribution of news and does not distribute it to its members.
The memorandum explaining provisions of the Finance Bill said the move to remove the tax exemption to news agencies was in accordance with the stated policy of the government of phasing out of exemptions and deductions under the Act.
“In accordance with the stated policy of the Government of phasing out of exemptions and deductions under the Act, the exemption available to news agencies under clause (22B) of section 10 of the Act is proposed to be withdrawn from the assessment year 2024-25,” the memorandum said.
Press Trust of India, which is owned by several newspapers, has been getting income tax exemption under this clause since the assessment year 1994-95 because it does not pay any dividend to its shareholders, and operates as a not-for-profit company.
All the income of the company is used for purposes of news gathering.
United News of India also is exempt from paying income tax because it too operates on a similar principle.
The memorandum said, “This amendment will take effect from 1st April, 2024 and will accordingly apply to the assessment year 2024-25 and subsequent assessment years”.
February 1, 2023