In a major decision, the Central Board of Direct Taxes (CBDT) has granted tax exemption to the New Okhla Industrial Development Authority (Noida) under Section 10(46A) of the Income Tax Act.
This means Noida Authority will not have to pay income tax on certain types of earnings starting from the assessment year 2024–25.
The move is expected to boost industrial development in Noida, one of India’s fastest-growing cities. However, this tax-free status comes with specific conditions.
What Type of Income is Exempt?
According to CBDT Notification No. 116/2025, the exemption is only for non-commercial income. This includes:
Rent from public properties
Government grants and subsidies
Charges collected for public services
Commercial income—like profits from real estate activities or interest earned on investments—will still be taxable.
The exemption applies only to income used for public welfare and not for profit-making.
Strict Conditions Must Be Followed
To continue enjoying this tax exemption, Noida Authority must:
Maintain separate accounts for exempt and non-exempt income
Avoid any misuse or overlap between public and commercial funds
If any misuse is found, the entire tax exemption can be cancelled. This means the authority must follow all rules carefully and keep its finances transparent.
Benefits for Residents and Businesses
Government officials believe this step will lead to:
More funds for improving roads, water supply, housing, and drainage systems
Faster approval of construction and industrial projects
Better infrastructure for both residents and investors
This tax relief is part of a larger effort by the Indian government to encourage tax-efficient urban development.
Similar benefits have already been offered to sovereign wealth funds and pension funds investing in infrastructure.
