CBDT Notifies Income Tax Exemption for BBNDA u/s 10(46)
The CBDT has granted income tax exemption to the Baddi Barotiwala Nalagarh Development Authority (BBNDA) under Section 10(46) of the Income-tax Act, 1961. This notification reinforces how statutory bodies can claim exemption on specified incomes — if their structure and functions align with government norms.
Let’s break down what this exemption means, who qualifies, and what conditions apply.
What is Section 10(46) of the Income-tax Act?
Section 10(46) provides income tax exemption to certain bodies, authorities, boards, and commissions set up under Central or State laws. These must:
- Be notified by the CBDT via a gazette notification
- Perform functions in the public interest, like regulation, development, or welfare
- Not engage in commercial activity for profit
The exemption applies only to specified types of income as mentioned in the notification.
Who is Baddi Barotiwala Nalagarh Development Authority (BBNDA)?
BBNDA is a statutory authority under the Himachal Pradesh Urban Development Act, responsible for:
- Planned urban development
- Infrastructure creation in industrial areas
- Public utility management for the Baddi-Barotiwala-Nalagarh region
Given its public purpose and non-profit operations, BBNDA qualifies for tax exemption under this section.
Notification Highlights – CBDT Notification No. 83/2025
As per CBDT Notification No. 83/2025 dated 11.07.2025, the following incomes of BBNDA are exempt from tax under Section 10(46):
✅ Exempt Income Categories:
- Grants received from State Government
- Monetary contributions from industries and local bodies
- Fees, fines, and charges levied for development activities
- Interest income from investments of surplus funds
Conditions to Claim Exemption under Section 10(46)
The exemption is not automatic. The notified authority must comply with the following:
- Maintain separate books of account for exempt income
- File returns and audit reports as per IT Act provisions
- Use income only for public functions; any misuse may lead to withdrawal of exemption
- The authority must not engage in any activity for commercial profit
Expert Tip:
If you’re a statutory body, board, or authority, or advising one, don’t assume you’re exempt by default. You must be notified by the CBDT with a specific order under Section 10(46). Apply through your jurisdictional CIT with full documentation of your structure, purpose, and income sources.
How Does This Benefit Other Bodies?
This exemption sets a precedent for similar state-level development bodies like:
| Authority Type | Can They Apply? |
|---|---|
| Industrial Development Authorities | Yes |
| Urban Planning Agencies | Yes |
| Public Welfare Boards (non-commercial) | Yes |
| Regulatory Commissions | Maybe (depends) |
Each must apply separately and justify how their income qualifies under the section.
Summary
CBDT has granted income tax exemption to the Baddi Barotiwala Nalagarh Development Authority (BBNDA) under Section 10(46) of the Income-tax Act. The exemption applies to grants, charges, and interest income. This reinforces the scope of tax benefits available to non-commercial statutory bodies serving public functions.
FAQs
Q1. Can a private trust apply under Section 10(46)?
No. Section 10(46) is strictly for public authorities or statutory bodies notified by CBDT.
Q2. Is the exemption permanent?
No. CBDT notifications usually mention the applicable financial years. In this case, it applies from FY 2024–25 to FY 2026–27, unless withdrawn earlier.
Q3. Where can I check the list of all notified entities?
You can refer to the official Income Tax portal for a full list of 10(46) exemptions.
Final Word
The BBNDA exemption is a good reminder that public bodies with welfare functions can save tax if structured correctly. At Efiletax, we help government-backed entities and advisors prepare documentation and compliance for such exemptions.
Need help filing or applying under Section 10(46)?
📩 Contact Efiletax to ensure your exemption is valid, documented, and safeguarded.