The Central Board of Direct Taxes (CBDT) in a landmark decision under Section 10(46A) of the Income Tax Act has granted income tax exemption to Noida, the New Okhla Industrial Development Authority. This exemption means that the authority will not have to pay any tax on several types of income, which in turn will result in more savings. The Noida Authority will be able to use the extra income earned as an exemption from income tax on infrastructure and other projects. The exemption comes into effect from Assessment Year 2024–25. The latest decision can potentially reshape the urban and industrial growth of one of Uttar Pradesh’s fastest-developing regions.
Relief By Central Government
According to a report by Moneycontrol, this relief has been given to the authority by the Central Government through Notification No. 116/2025 of the Central Board of Direct Taxes (CBDT).
However, things are not as easy as they appear, because the exemption or the ‘tax-free’ status has some strings attached.
Noida, a statutory public utility authority, has been granted exemption only for non-commercial income.
This includes earnings generated from the following:
- Rental income from government-owned properties
- Government-provided grants and financial subsidies
- Fees and charges collected for public services
Moreover, it is to be noted that the income generated from any commercial activity, including real estate sales, interest from investments, or for-profit ventures, will not be covered under the tax exemption facility and will remain fully taxable.
Reinvest Into Infrastructure
According to a senior official, the exemption “allows NOIDA to reinvest more of its earnings into infrastructure without tax leakage.”
This exemption is part of a broader initiative by the Indian government to promote tax-efficient urban development. In recent years, similar tax incentives have been offered to Sovereign Wealth Funds and Pension Funds investing in infrastructure projects.
