CBDT notifies OPELIP for Section 10(46) exemption: Detailed analysis for AY 2025-26 to AY 2029-30

The Central Board of Direct Taxes (CBDT) has issued Notification No. 38/2026 dated 27th March, 2026, extending the benefit of exemption under Section 10(46) of the Income Tax Act 1961 to the Odisha PVTG Empowerment and Livelihoods Improvement Programme (OPELIP). This notification recognises OPELIP as an eligible “Authority” of the State Government of Odisha and specifies certain categories of income that will not be taxed, subject to strict conditions.

This write-up explains:

  • What OPELIP has been exempted from under Section 10(46)
  • The exact nature of “specified income” covered
  • Key conditions imposed by CBDT
  • Period of applicability and retrospective effect
  • Practical compliance points and risk of withdrawal of exemption

Statutory framework: Section 10(46)

Section 10(46) of the Income Tax Act 1961 empowers the Central Government to notify any body, authority, board, trust or commission (by whatever name called), set up by a Central or State Act or constituted by Government, for the purpose of granting exemption in respect of specified income, provided such entity is:

  • Established/constituted for regulating or administering an activity for the benefit of the public; and
  • Not engaged in commercial activities; and
  • Notified by the Central Government with a clear list of exempt income categories.

The exemption applies only to “specified income” mentioned in the notification. Any income outside that list remains taxable as per normal provisions of the Act.

The present notification brings OPELIP within this framework for a limited duration and for identified income streams.

Entity covered: OPELIP as notified Authority

The notification recognises the following entity for the purposes of Section 10(46):

  • Name of Authority: Odisha PVTG Empowerment and Livelihoods Improvement Programme (OPELIP)
  • Status: Authority constituted by the State Government of Odisha
  • PAN: AAALO0342F

OPELIP is a programme established by the Government of Odisha to improve livelihoods and empower Particularly Vulnerable Tribal Groups (PVTGs). In line with its welfare-oriented mandate, CBDT has now formally extended income tax exemption to its specified income categories.

Nature of specified income exempt under Section 10(46)

Under Notification No. 38/2026, the Central Government has exempted the following specified income of OPELIP from income tax under Section 10(46):

  1. Grants from the State Government

    • Any grants received from the Government of Odisha form part of the exempt income.
    • These are typically budgetary allocations or financial assistance provided for programme implementation, capacity building, infrastructure, and related welfare activities.

  2. Interest on fixed deposits and savings accounts refundable to the Government of Odisha

    • Interest earned on funds parked in fixed deposits or savings bank accounts is exempt only to the extent such funds (including interest) are refundable to the Government of Odisha.
    • This typically covers funds temporarily invested pending utilisation, where both principal and interest revert to the State Government as per scheme terms.
    • If there are any deposits or accounts where amounts are not refundable to the Government, interest on such funds would fall outside this exemption and may be taxable.

  3. Non-refundable tender fee

    • Non-refundable tender fees collected by OPELIP in the course of tendering or procurement processes are also treated as exempt income.
    • Since these fees are non-refundable by design and form part of the cost recovery associated with implementing government schemes, they are included in the specified income list.

Important: The exemption operates only for the above three categories.