Good News For Noida Residents & Businesses: CBDT Announces Major Income Tax Exemption

NOIDA Tax Exemption: Under a major expemtion, New Okhla Industrial Development Authority (NOIDA) is not required to pay income tax begining from assesment year (AY) 2024-25.

As per a Central Board of Direct Taxes (CBDT) notification, NOIDA, a public utlity body is exempted from paying taxes under  Section 10 (46A) of the Income Tax Act.

This apllies to non-commercial activities of NOIDA, which was formed under the Uttar Pradesh Industrial Area Development Act, 1976

What Is This NOIDA Specific-Exemption?

According to the latest notification, income from public utility services such as rent, fees, and government grants will no longer be taxed as per Section 10 (46A) of the Income Tax Act. Meanwhile, any activity that is acrried which is commercial in nature or for profit is entirely taxable.

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CBDT Notification

The CBDT notification mentioned, “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 This Exemption Mean For NOIDA Residents?

The perks translate into imporved infrastructure such as housing facilities,roads, drainage systems,  and transportation, without paying higher local taxes than the ones already in place.

What Does This Exemption Mean For Local Businesses?

The exemption is expected to bolster the rate of approval of projects and better industrial infrastructure for businesses, even though the tax liabilities remain the same.

Is There A Catch To This Exemption?

The tax department has issued a condition under this exemption. NOIDA is required to keep clear records differentiating between exempt and non-exempt income to avail the tax benefits.