CBDT Notifies Income Tax Exemption to Baddi Barotiwala Nalagarh Development Authority :

The Central Government has issued a notification granting income tax exemption to the Baddi Barotiwala Nalagarh Development Authority (BBNDA) under the provisions of Section 10(46) of the Income-tax Act, 1961. While the Income-tax Act, 1961 has been repealed and replaced by the Income-tax Act, 2025, the government clarified that the old law shall continue to govern the pending proceedings, and earlier assessment years, thereby enabling such notifications to be legally valid.

Under the notification, the tax exemption applies to specific sources of income earned by the Authority. These include grants received from the Central Government or the Government of Himachal Pradesh, revenue collected under the Himachal Pradesh Town and Country Planning Act, 1977, and interest earned on bank deposits.

The exemption is subject to certain conditions, such as:

• The Authority shall not engage in any commercial activities

• The functions and the nature of its exempt income shall not change during the relevant financial years; and

• The Authority shall file its income tax returns as per the requirements of the Income-tax Act, 1961.

The government has also said that if the Authority fails to adhere to any of these conditions, then the tax exemption can be withdrawn and penal action can be initiated under the provisions of the old Income-tax Act.

The notification has been given retrospective effect and will be applicable for Assessment Years 2024-25, 2025-26 and 2026-27, i.e. Financial Years 2023-24, 2024-25 and 2025-26.