The Central Board of Direct Taxes (CBDT) has officially granted income-tax exemption to the Andhra Pradesh Pollution Control Board (APPCB) under Section 10(46) of the Income-tax Act, 1961. The move reinforces the government’s policy of supporting regulatory and statutory bodies involved in environmental protection, compliance monitoring, and sustainable development initiatives.
Background
The exemption, notified via Notification No. 78/2025 dated July 15, 2025, allows the APPCB to retain its earnings from specified sources without any tax liability. This step is aligned with the CBDT’s broader objective of providing relief to government authorities engaged in non-commercial, non-profit activities that serve public interest and uphold statutory mandates.
Nature of Exemption
The income exempted under this notification includes:
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Grants received from the State Government
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Fees or charges collected in accordance with applicable laws
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Income earned from interest on investments or fixed deposits
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Income from sale of publications
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Any other income received in the course of performing its statutory functions
This exemption will be applicable for the financial years 2024–25 to 2028–29, subject to the fulfillment of certain conditions, including:
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The APPCB must not engage in any commercial activity.
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The income should be used exclusively for statutory functions.
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It must file its income tax return and maintain proper books of accounts.
Significance and Policy Implication
This decision underscores the government’s focus on environmental governance, especially at the state level. By freeing essential regulatory bodies from tax liabilities, the CBDT enables them to better deploy financial resources toward pollution control, public health awareness, and environmental conservation initiatives.
It also reflects a uniform policy stance, as similar exemptions have previously been granted to various State Pollution Control Boards and autonomous public authorities, enhancing their operational capacity without the burden of taxation.
Expert Insight
CA Manoj Kumar, Environmental Taxation Consultant:
“This exemption empowers state regulators like APPCB to function more effectively. As environmental challenges intensify, such fiscal policies offer crucial institutional support and incentivise compliance-based governance.”
Dr. A. R. Sharma, Ex-Member, CPCB:
“The exemption under Section 10(46) is more than a tax relief; it acknowledges the public-good role these agencies perform in India’s sustainable development agenda.”
Conclusion
With this exemption, the Andhra Pradesh Pollution Control Board gains a stronger footing to execute its mission without fiscal constraints. The CBDT’s decision illustrates a policy alignment between taxation, governance, and environmental sustainability.
