Income of Investor Protection Fund set up by depositories [Section 10(23ED)]
(i) Under section 10(23EA), income by way of contributions from a recognised stock exchange
received by a Investor Protection Fund set up by the recognised stock exchange is exempt
from taxation.
(ii) In line with section 10(23EA), section 10(23ED) has been inserted to provide that any
income, by way of contribution from a depository, of such Investor Protection Fund set up by
a depository in accordance with the regulations made under the SEBI Act, 1992 and the
Depositories Act, 1996, will not be included while computing the total income of such investor
protection fund.
(iii) The Central Government, would, by way of notification in the Official Gazette, specify such
investor protection funds set up by depositories in accordance with the SEBI and depositories
regulations.
However, where any amount standing to the credit of the fund and not charged to income-tax
during any previous year is shared wholly or partly with a depository, the amount so shared
shall be deemed to be the income of the previous year in which such amount is shared.
Accordingly, such amount would be chargeable to income-tax.
(iv) “Depository” means a company formed and registered under the Companies Act, 1956 and which
has been granted a certificate of registration under section 12(1A) of the SEBI Act, 1992.
(i) Under section 10(23EA), income by way of contributions from a recognised stock exchange
received by a Investor Protection Fund set up by the recognised stock exchange is exempt
from taxation.
(ii) In line with section 10(23EA), section 10(23ED) has been inserted to provide that any
income, by way of contribution from a depository, of such Investor Protection Fund set up by
a depository in accordance with the regulations made under the SEBI Act, 1992 and the
Depositories Act, 1996, will not be included while computing the total income of such investor
protection fund.
(iii) The Central Government, would, by way of notification in the Official Gazette, specify such
investor protection funds set up by depositories in accordance with the SEBI and depositories
regulations.
However, where any amount standing to the credit of the fund and not charged to income-tax
during any previous year is shared wholly or partly with a depository, the amount so shared
shall be deemed to be the income of the previous year in which such amount is shared.
Accordingly, such amount would be chargeable to income-tax.
(iv) “Depository” means a company formed and registered under the Companies Act, 1956 and which
has been granted a certificate of registration under section 12(1A) of the SEBI Act, 1992.
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