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CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

A tax consultant is asked whether SEBI, as established under its Act, is liable to income-tax on income derived by it. What does Section 25 provide?

SEBI is not liable to pay wealth-tax, income-tax or any other tax on its wealth, income, profits or gains. Section 25 gives this exemption notwithstanding the Income-tax Act, 1961, and extends it to the existing board for its period before the statutory Board was established.

  1. AThe Board is not liable to pay wealth-tax, income-tax or any other tax on its wealth, income, profits or gainsCorrect
  2. BThe Board pays income-tax at a concessional rate fixed by the Central Government
  3. CThe Board is exempt only on income from investments, not on fees
  4. DThe Board is liable to tax, but only the existing Securities and Exchange Board was exempt

Explanation

Section 25 says that, notwithstanding the Income-tax Act, 1961 or any other enactment, the Board is not liable to pay wealth-tax, income-tax or any other tax on its wealth, income, profits or gains. The exemption covers the Board and also the existing board for the period up to the Board's establishment, so the last option is wrong. The section has no concessional rate or limit to investment income.

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