The Central Board of Direct Taxes (CBDT) has formally notified the New Okhla Industrial Development Authority (NOIDA) as an exempt entity under Section 10(46A) of the Income Tax Act, 1961. This tax relief is expected to streamline NOIDA’s financial operations by excluding specific income streams from taxation, effective from FY 2024–25 to FY 2028–29.
What the Notification Says
As per the official notification dated 11 July 2025 (F. No. 300196/15/2024-ITA-I), NOIDA’s exemption will apply to:
Grants or subsidies received from the government
Fees, charges, and levies collected in the course of statutory functions
Lease rentals, penalties, and interest income derived from such funds
The exemption is conditional. NOIDA must strictly utilize these funds for public purposes and avoid any commercial activity beyond its statutory mandate.
Legal Context: Section 10(46A)
Section 10(46A), introduced in the Finance Act 2023, provides targeted tax exemptions to government-established authorities performing non-commercial public functions. NOIDA, created under the Uttar Pradesh Industrial Area Development Act, 1976, qualifies under this provision as a statutory authority undertaking planning, infrastructure development, and industrial promotion in the NCR region.
Expert Commentary
CA Manish Mishra:
“The exemption under Section 10(46A) brings long-overdue clarity to statutory authorities like NOIDA. It reflects the government’s intent to ring-fence public utility entities from tax drag.”
CA Neha Gupta, Direct Tax Advisor, noted:
“This move reinforces the principle that authorities engaged in welfare-centric development should not be subject to income tax when performing sovereign-like functions.”
Implications Going Forward
This exemption sets a strong precedent for similar industrial authorities such as GNIDA, YEIDA, and Haryana State Industrial bodies to apply for comparable relief. The move may also encourage better fund allocation and simplified audits for these entities.
Conclusion
CBDT’s move to exempt NOIDA under Section 10(46A) is a strategic alignment of tax policy with infrastructure governance. It removes operational bottlenecks and reaffirms the government’s recognition of statutory authorities as vehicles of planned urban growth.
