Govt exempts certain IBBI earnings from income tax for five years
The government of India has notified the income tax exemptions to certain income of the insolvency regulator – Insolvency and Bankruptcy Board of India (IBBI).
In a notification issued recently, the government has exempted grants-in-aid received by IBBI from the central government; fees received under the Insolvency and Bankruptcy Code, 2016; fines collected under the Insolvency and Bankruptcy Code, 2016; and interest income accrued on all the previous earnings.
However, the exemptions offered are subject to certain conditions.
- IBBI shall not engage in any commercial activity;
- Activities and the nature of the specified income shall remain unchanged throughout the financial years;
- It shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961. 3.
This exemption from income tax will be applicable with respect to the financial years 2022-2023 to 2026-2027.
Some of the fees collected by IBBI
The Insolvency and Bankruptcy Board of India collects various fees for the services provided by it under the Insolvency and Bankruptcy Code, 2016 (IBC). The following is a list of some of the fees collected by the IBBI:
Registration Fee for Insolvency Professionals (IPs): The regulator collects a registration fee from individuals who wish to become IPs under the IBC. As per the IBBI (Insolvency Professionals) Regulations, 2016, the fee for registration as an IP is Rs. 20,000.
Annual professional Fee for Insolvency Professionals (IPs): IPs are required to 2% of professional fee earned in preceding financial year.
Regulatory fee: IBBI collects from the IP 0.25% of the realisable value to creditors under the resolution plan approved under section 31, where such realisable value is more than the liquidation value
Recognition fee for Insolvency Professional Entities (IPAs): The insolvency regulator also collects a recognition fee from IPEs who wish to get recognised as IP under the IBC. As per the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016, the fee for recognition as IP is Rs 2 lakh.
Annual turnover for Insolvency Professional Agencies (IPEs): IPAs are required to pay an annual fee to the IBBI to maintain their registration. The annual fee for IPAs is Rs. 50,000.
Information Utility Registration Fee: The IBBI also collects a registration fee from entities that wish to become information utilities under the IBC. As per the IBBI (Information Utilities) Regulations, 2017, the fee for registration as an information utility is Rs. 10 lakh.
Information Utility Annual Fee: Information utilities are required to pay an annual fee to the IBBI to maintain their registration. The annual fee for information utilities is Rs. 10 lakh.
Also See: Insolvency regulator revises fees for insolvency professionals, IPEs
