Section 10(24) of the Income Tax Act provides a tax exemption for certain types of income earned by registered trade unions and their associations.
Who Qualifies:
- A registered union under the Trade Unions Act, 1926, formed primarily to regulate:
- Relations between workmen and employers, or
- Relations among workmen themselves.
- An association of such registered unions.
What’s Exempt:
- Income chargeable under the heads:
- “Income from house property”, and
- “Income from other sources”.
This means rental income, interest income, or other miscellaneous receipts are exempt—but only if the union is registered and formed for the specified labor-related purposes.
Example:
Suppose the National Textile Workers Union, registered under the Trade Unions Act, owns a small office building and earns ₹10 lakh annually in rent and ₹2 lakh in bank interest. Since it qualifies under Section 10(24), the entire ₹12 lakh is exempt from income tax.
However, if the union earns business income (say, from running a cooperative store), that portion would not be exempt under this section.