National Mission for Clean Ganga (NMCG):

Why in News? The Central Board of Direct Taxes (CBDT)  has issued a notification under clause 46A of Section 10 of the Income Tax Act, 1961, which grants tax exemption to the National Mission for Clean Ganga (NMCG) on its income.

 The designation of NMCG as an authority :What does it Means ?

The designation of the National Mission for Clean Ganga (NMCG) as an authority under Clause 46A of Section 10 of the Income Tax Act, 1961, refers to a specific provision in Indian tax law that provides tax exemptions to certain entities involved in public welfare activities.

Section 10 of the Income Tax Act, 1961: This section outlines various types of income that are exempt from income tax in India. It includes exemptions for specific organizations, trusts, institutions, and authorities engaged in charitable, religious, or public utility purposes, provided they meet certain conditions.

Purpose: The exemptions aim to encourage and support entities working for societal benefits (e.g., education, health, environmental conservation) by reducing their financial burden.

Clause 46A of Section 10:

• Clause 46A was introduced to extend tax exemptions to specific authorities or bodies established by the government for environmental or ecological purposes.
• Specific Provision: Under this clause, income derived by an authority constituted under a Central or State Act, or notified by the Central Government, for the purpose of protecting the environment or promoting ecological balance, is exempt from income tax.

Conditions: The authority must be:

• Established or notified by the government.
• Engaged in activities aligned with environmental conservation or ecological improvement.
• Approved by the Central Government for this exemption.

Application to NMCG:

• NMCG’s Role: The National Mission for Clean Ganga is a registered society under the Societies Registration Act, 1860, and serves as the implementing arm of the National Ganga River Basin Authority (NGRBA). Its primary objective is the conservation and cleaning of the Ganga River, a critical environmental and cultural asset.
• Designation: By being notified under Clause 46A, the NMCG is recognized as an authority eligible for tax exemption on its income. This includes funds received for projects, grants, or other revenues used for Ganga rejuvenation.
• Impact: The tax exemption reduces the financial strain on NMCG, allowing it to allocate more resources toward its ambitious goals, such as pollution control, riverfront development, and afforestation along the Ganga basin.

Legal and Practical Significance:

• Legal Basis: The notification aligns with the government’s environmental policy under the National Mission for Clean Ganga (NMCG), launched in 2011, and reflects the integration of fiscal incentives with ecological goals.
• Example: Income from donations, government grants, or project funds used for cleaning the Ganga would not be taxed, provided the NMCG complies with the conditions set by the Income Tax authorities.
• Broader Context: This provision supports India’s commitment to sustainable development and the United Nations’ Sustainable Development Goals (SDGs), particularly Goal 6 (Clean Water and Sanitation).

 About the Income Tax Act, 1961:

It is the central law in India governing the taxation of income. It provides the legal framework for imposing, collecting, and managing income taxes on individuals, businesses, and other entities. Below are the key aspects of the Act:

Key Features:

Applicability:

• The Act applies to all taxable incomes earned in India by individuals, Hindu Undivided Families (HUFs), companies, firms, associations of persons (AOPs), bodies of individuals (BOIs), and other entities.

Administration:

• It is administered by the Central Board of Direct Taxes (CBDT), which functions under the Ministry of Finance.

Income Heads:

The Act categorizes income into five heads:

1. Income from Salary.
2. Income from House Property.
3. Income from Profits and Gains of Business or Profession.
4. Income from Capital Gains.
5. Income from Other Sources.

Tax Rates:

Individuals: Tax rates are progressive, based on income slabs.

Corporate Entities: Tax rates vary based on the size and nature of the company (e.g., domestic vs. foreign companies).

Exemptions and Deductions:

• Several exemptions and deductions are provided to taxpayers under sections like 80C, 80D, 80G, and more. These reduce the taxable income.
• Specific exemptions are also provided to certain bodies, trusts, and government initiatives, as seen in Section 10.

Income Tax Slabs:

• The slabs and rates are revised periodically during the Union Budget. Special provisions exist under the new tax regime introduced in 2020.