Big Boost For Noida: CBDT Grants Tax Relief On Public Utility Income; What It Means

Last Updated:July 21, 2025, 10:45 IST

Starting from Assessment Year 2024–25, NOIDA is exempt from income tax on non-commercial earnings under Section 10(46A), enabling more investment in public infrastructure.

The New Okhla Industrial Development Authority, in short ‘Noida’ won’t have to pay income tax on certain earnings, thanks to a new exemption under Section 10(46A) of the Income Tax Act. It is effective from the Assessment Year 2024–25, The Central Board of Direct Taxes (CBDT) made it official with the new notification.

Let’s break down what this means and why it’s a big deal.

What’s Exempt and What’s Not?

This tax break applies to Noida’s non-commercial income—like rent, service fees, and government grants. Since Noida was set up under the Uttar Pradesh Industrial Area Development Act of 1976, it qualifies as a public utility body, making it eligible for this relief. But there’s a catch: any money Noida makes from commercial or profit-driven activities will still be taxed as usual.

Why This Matters

A senior official put it simply as quoted by several media reports: this exemption lets Noida keep more of its money to invest in public infrastructure. It can focus on building better roads, improved housing, upgraded drainage systems, and smoother transport—without raising local taxes or fees. For businesses in the area, this could mean faster project approvals, better industrial facilities, and more efficient public services.

How It Benefits Residents and Businesses

For those living in Noida, this is a win. The extra funds could lead to noticeable upgrades in their daily life—smoother roads, better public transport, or improved urban planning. Businesses can expect a boost too, with Noida likely to streamline services and improve industrial infrastructure, making it easier to get projects off the ground.

There’s a condition to this tax break: Noida has to keep clear, separate accounts for its exempt and non-exempt income. If they don’t, the exemption could be revoked. So, they’ll need to stay on top of their bookkeeping to keep this benefit.

This exemption puts Noida in the same league as Sovereign Wealth Funds and Pension Funds that support infrastructure in India.

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