CBDT Grants Income Tax Exemption to FSSAI under Section 10(46A)
The Central Board of Direct Taxes (CBDT) has notified an income tax exemption to FSSAI under Section 10(46A) of the Income-tax Act, 1961. This move formally recognises FSSAI as a government authority eligible for income-tax-free status on certain types of income.
Let’s break down what this means, how Section 10(46A) works, and why such exemptions matter.
What is Section 10(46A) of the Income-tax Act?
Section 10(46A) was inserted via the Finance Act, 2021, and is a tax exemption provision for certain specified income of “any body or authority” constituted under a central or state law. It replaced and expanded the scope of earlier Section 10(46), offering clarity and continuity to exemptions.
Key features:
- Applies to bodies established by government law
- Exempts income notified by CBDT
- Requires a CBDT notification published in the Official Gazette
- Income must not be from commercial activities
CBDT Notification: FSSAI’s Tax Exemption
As per the recent CBDT Notification No. 47/2025 dated 20th June 2025, the following incomes of the Food Safety and Standards Authority of India (FSSAI) are exempt under Section 10(46A):
✅ Fees received under the Food Safety and Standards Act, 2006
✅ Interest earned on investments
✅ Grants received from the Central Government
📌 Source: CBDT Notification No. 47/2025 (incometaxindia.gov.in)
Legal Basis & Interpretation
Section 10(46A) states that income of certain non-commercial, statutory bodies will be exempt from tax if:
- They are established under a law (e.g., FSSAI under the FSS Act, 2006)
- Their income is not for profit
- CBDT specifically notifies them under the section
Important Note: The exemption is not automatic. Each body must be individually notified by CBDT, as in the case of FSSAI.
Expert Insight: Why These Exemptions Matter
“Tax exemptions like these reduce administrative burdens and ensure public-interest bodies can focus on governance, not compliance. But they must strictly avoid commercial activity.”
— CA Ramesh Krishnan, Direct Tax Specialist
Table: Section 10(46A) vs Section 10(46)
| Feature | Section 10(46) | Section 10(46A) |
|---|---|---|
| Introduced via | Finance Act, 2011 | Finance Act, 2021 |
| Type of entities covered | Statutory authorities | Broader scope including notified bodies |
| Still valid? | Phased out for new notifications | Yes (for new notifications) |
| Governing clause | Clause (46) of Section 10 | Clause (46A) of Section 10 |
How Can a Body Apply for 10(46A) Exemption?
- Formulate application with governing documents and audited accounts
- Submit to CBDT through ITD portal or jurisdictional CIT
- Await CBDT’s notification in the Official Gazette
- Post-approval, only specified incomes are exempt
Use Case: How It Impacts FSSAI
- Income from licence fees, certifications, and registration will not be taxed
- Interest income from surplus funds is also exempt
- FSSAI will still need to file ITR but can claim the notified exemption
Summary
CBDT has notified income tax exemption to FSSAI under Section 10(46A) of the Income-tax Act, 1961. This exempts FSSAI’s statutory income from licence fees, interest, and government grants from tax, provided it’s not engaged in commercial activities.
FAQ on Income Tax Exemption for FSSAI
Q1. Is FSSAI fully exempt from income tax?
No. Only specified incomes notified by CBDT are exempt under Section 10(46A).
Q2. Can other bodies also apply for this exemption?
Yes. Any statutory body can apply, but approval depends on CBDT notification.
Q3. Does exemption mean no compliance?
No. Exempt bodies must still maintain books, get audited, and file ITR.