NEW DELHI :
A total of 165 District Mineral Foundation funds (DMF) trusts have been exempted from income tax payments, according to a notification from the central board of direct taxes (CBDT) in the central government’s Gazette of India.
DMF is a social impact fund that miners have to contribute towards and DMFs have been set up in 600 districts in 22 states.
“The Union mines, coal and parliamentary affairs minister, Shri Pralhad Joshi has thanked Hon’ble Prime Minister Shri Narendra Modi for exempting 165 District Mineral Foundation Trusts (DMF), from Income Tax payment,” union ministry of mines said in a statement on Saturday.
“Collections under DMF as well as interest accrued will be exempted from IT. A Gazette notification has been issued to this effect. I thank @FinMinIndia for exempting 165 Trusts. Adding to earlier exemption of 151, now a total of 316 Trusts stand exempted from IT,” coal, mines and Parliamentary affairs minister Pralhad Joshi said in a tweet.
This comes against the backdrop of National Mineral Policy goals to increase mineral production by 200% in 7 years. Of India’s obvious geological potential area of 0.571 million sq. km, only 10% has been explored.
“Through the amendment in Mines & Minerals (Development & Regulation) (MMDR) Act, in 2015, Government of India has made provision for establishment of District Mineral Foundation in all the districts affected by mining. The object of the District Mineral Foundation is to work towards the interest and benefit of persons, and areas affected by mining related operations in such manner as may be prescribed by the state government,” the statement added.
The union government is exploring further amendment to the Mines and Minerals (Development and Regulation) (MMDR) Act to bring in more reforms in India’s mining sector. The government earlier introduced a raft of mineral sector reforms, including doing away with the distinction between the captive and non-captive mines, reallocation of non-producing blocks of state-owned firms, and amended some sections of the MMDR Act to help auction more mines.
“Shri Joshi has also thanked the Union Finance Minister Smt. Nirmala Sitharaman. A Gazette notification has been issued to this effect yesterday by Ministry of Finance (Department of Revenue) (Central Board of Direct Taxes). Ministry of Mines has taken up with Ministry of Finance regarding issuance of notification for Income-tax exemption u/s 10(46) of the Income-tax Act, 1961 in respect to the District Mineral Foundations,” the statement said.
This assumes significance given that the mineral sector contributes only 1.75% to the country’s gross domestic product (GDP), with India importing minerals worth ₹2.5 trillion annually. The union mines ministry has also adopted the scheme for accreditation of private exploration agencies for prospecting minerals.
“This will result in more fund availability with the Trust, thus ensuring better implementation & outcome-oriented activities for welfare of mining affected people,” Joshi said in another tweet.
“The DMF is a non-profit statutory ‘Trust’ for every Indian district affected by mining-related operations. It is an initiative of the PM @narendramodi ji led Govt to ensure that funds be collected under DMF and utilised for welfare of those affected by mining-related operations,” Joshi added in another tweet.
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