Specified income arising to a Notified Body / Authority / Board / Trust / Commission [Section 10(46)]

Section 10(46) of the Income Tax Act, 1961 provides for exemption from income tax of the specified income arising to a notified body, authority, board, trust, or commission.

A notified body, authority, board, trust, or commission is a body, authority, board, trust, or commission that is established or constituted by or under a Central or State Act or by a Central or State Government and that is not a company.

The specified income that is exempt from tax under Section 10(46) is the income that is derived from the following sources:

• Fees and charges levied for the services rendered.
• Grants received from the Central or State Government.
• Interest earned on the above income.

Any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called) or a class thereof which—

(a)        has been established or constituted by or under a Central. State or Provincial Act or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;

(b)        is not engaged in any commercial activity; and

(c)        is notified by the Central Government in the Official Gazette for the purposes of this clause shall be exempt from income-tax.

Conditions for Exemptions:

To be eligible for the exemption under Section 10(46), the following conditions must be satisfied:

• The body or authority or board or trust or commission must be established or constituted by or under a Central or State Act or by a Central or State Government.
• The body or authority or board or trust or commission must not be engaged in any commercial activity.
• The body or authority or board or trust or commission must be notified by the Central Government.
• The income must be of a specified nature.

Examples of bodies or authorities or boards or trusts or commissions U/s 10(46)

Here are some examples of notified bodies, authorities, boards, trusts, or commissions that are eligible for the exemption under Section 10(46):

• The Municipal Corporation of Delhi (MCD)
• The Brihanmumbai Municipal Corporation (BMC)
• The Chennai Municipal Corporation
• The Kolkata Municipal Corporation
• The Noida Authority
• The Greater Noida Industrial Development Authority
• The Airports Authority of India (AAI)
• The National Highways Authority of India (NHAI)
• The Indian Railways
• The Reserve Bank of India (RBI)
• The Securities and Exchange Board of India (SEBI)
• The All India Council for Technical Education (AICTE)
• The Medical Council of India (MCI)

Examples of Incomes eligible for Exemptions:

Here are some examples of specified income that is exempt from tax under Section 10(46):

• The income of the Municipal Corporation of Delhi (MCD) from property taxes.
• The income of the Brihanmumbai Municipal Corporation (BMC) from water and sewerage charges.
• The income of the Noida Authority from land development fees.
• The income of the Securities and Exchange Board of India (SEBI) from registration fees.
• The income of the Indian Institute of Technology Delhi (IIT Delhi) from tuition fees.
• The income of the Red Cross Society of India from donations.