CBDT Grants Tax Exemption to Patiala Urban Planning and Development Authority Under Section 10(46A)

Overview of the Notification

The Central Board of Direct Taxes (CBDT) has issued Notification No. 30/2026, dated 25th March 2026, exercising its powers under Section 10(46A) of the Income-tax Act, 1961. Through this notification, the Patiala Urban Planning And Development Authority (PDA) — bearing PAN AAALP0095J — has been formally recognised as an eligible authority entitled to claim income tax exemption under the said provision.

This development carries significant relevance for statutory bodies engaged in urban development and public utility functions across India, reinforcing the legislative intent behind Section 10(46A) of the Income-tax Act, 1961.

What Does Section 10(46A) Provide?

Section 10(46A) of the Income-tax Act, 1961 provides an income tax exemption to bodies or authorities that are:

  • Constituted under a Central or State Act, or established by the Central or State Government
  • Engaged in carrying out one or more public utility functions as specified under sub-clause (a) of clause (46A) of Section 10
  • Formally notified by the Central Government through an official gazette notification

The provision operates in two parts:

  1. Sub-clause (a) — Lists the qualifying purposes or functions that the authority must perform
  2. Sub-clause (b) — Empowers the Central Government to notify such an authority upon satisfaction that the conditions are fulfilled

It is only upon issuance of such a notification that the concerned statutory body becomes eligible to claim exemption from income tax on its receipts and income that are incidental to its notified functions.

Why Is This Provision Significant?

Statutory authorities constituted under State or Central legislation often receive grants, fees, levies, and other forms of income in connection with their public mandates. Without a specific exemption, such receipts would ordinarily be subject to income tax. Section 10(46A) ensures that bodies performing genuine public functions are not burdened by tax liability on income that flows directly from their statutory duties.

The Patiala Urban Planning And Development Authority (PDA)

Statutory Constitution

The Patiala Urban Planning And Development Authority was constituted under the Punjab Regional and Town Planning and Development Act, 1995 (Act 11 of 1995). This State legislation governs the planning, development, and regulation of urban regions within Punjab, and various development authorities have been set up under its provisions to implement these objectives at the regional level.

The PDA operates as a statutory body with a defined public mandate, primarily focused on: