No tax in NOIDA? CBDT gives THIS exemption under Income Tax Act — what it means for residents, businesses

New Okhla Industrial Development Authority (NOIDA) will not be required to pay income tax, after a major exemption under Section 10 (46A) of the Income Tax Act, starting from assessment year 2024–25.

The Central Board of Direct Taxes (CBDT) issued a notification on July 17 granting NOIDA, an authority constituted under the Uttar Pradesh Industrial Area Development Act, 1976, an exemption for performing non-commercial roles.

What is the exemption?

According to the latest notification, income from public utility services like rent, fees, and government grants will no longer be taxed as per Section 10 (46A) of the Income Tax Act. However, any commercial or profit-driven activities conducted by NOIDA will still be fully taxable.

What does the notification say?

The notification issued by CBDT read, “In exercise of the powers conferred by sub-clause (b) of clause (46A) of section 10 of the Income-tax Act, 1961 (43 of 1961), (hereinafter referred to as “the Income-tax Act”), the Central Government hereby notifies “New Okhla Industrial Development Authority” (PAN: AAALN0120A) (hereinafter referred to as “the assessee”), an authority constituted under the Uttar Pradesh Industrial Area Development Act, 1976 (U.P. Act No. 6 of 1976), for the purposes of the said clause.”

What does the new rule mean for residents?

The benefits of the latest rule for residents will most likely include improved conditions of roads, housing facilities, transportation, and drainage systems without the imposition of increased local taxes.

What does the new rule mean for businesses?

The exemption will reportedly result in quicker approval of projects and better industrial infrastructure for businesses, even though the tax liabilities remain the same.

A condition

However, the tax department has issued a condition under this exemption. NOIDA will be required to maintain clear records distinguishing between exempt and non-exempt income to avail the tax benefits.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Readers are advised to consult with qualified tax professionals, legal advisors, or financial consultants before making any decisions regarding offshore residency, taxation, or business restructuring. Tax laws are subject to change and may vary based on individual circumstances.