Comprehensive Legal Analysis: CBDT Notifies Tax Exemption for Kerala RERA Under Section 10(46)

The Central Board of Direct Taxes (CBDT) has recently promulgated a significant directive providing categorical tax relief to the state-level real estate regulatory body in Kerala. Through the issuance of Notification No. 101/2026-Income Tax, officially dated 29th July, 2026, the apex direct tax administrative body has recognized the Kerala Real Estate Regulatory Authority for specific exemptions. This regulatory body, identifiable by its Permanent Account Number (PAN: AAAGK1025N), has been granted immunity from income tax on designated revenue streams under the provisions of Section 10(46) of the Income-tax Act, 1961.

This notification, published under S.O. 4190(E), is particularly noteworthy because it bridges the legislative transition between the erstwhile tax regime and the newly enacted statutes, invoking specific transitional and saving clauses. The exemption is not absolute; it is ring-fenced by strict compliance parameters, the violation of which would strip the assessee of these benefits and invite penal consequences.

Legislative Framework and Statutory Transition

To fully grasp the implications of this notification, one must understand the complex statutory interplay between the repealed tax laws and the current legislative framework.

The Repeal and Saving Mechanism

The Income-tax Act, 1961 was formally repealed by the enactment of Section 536(1) of the Income-tax Act, 2025. However, to ensure that the transition does not disrupt ongoing regulatory exemptions, assessments, and accrued rights, the legislature embedded robust saving clauses within the new Act. The CBDT has explicitly invoked these saving clauses to validate the exemption granted to the Kerala Real Estate Regulatory Authority.