The Central Board of Direct Taxes (CBDT), through Notification No. 31/2026, granted income tax exemption status to the Varanasi Development Authority under Section 10(46A) of the Income-tax Act, 1961. The notification recognizes the authority as a qualifying statutory body constituted under the Uttar Pradesh Urban Planning and Development Act, 1973. The exemption is effective from AY 2025–26 and is conditional upon the authority continuing to operate under the same statute and fulfilling specified purposes under the Act. The government clarified that retrospective applicability from the date of application does not adversely affect any person. The decision reinforces that statutory development authorities engaged in public functions can avail tax exemption, provided they meet the prescribed legal conditions and maintain their statutory character.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 31/2026-Income Tax | Dated: 25th March, 2026
S.O. 1578(E).— In exercise of the powers conferred by sub-clause (b) of clause (46A) of section 10 of the Income-tax Act, 1961 (43 of 1961), (hereinafter referred to as “the Income-tax Act”), the Central Government hereby notifies “Varanasi Development Authority” (PAN:AAATV6811A), (hereinafter referred to as “the assessee”), an authority constituted under the Uttar Pradesh Urban Planning and Development Act, 1973 (President’s Act No.11 of 1973) for the purposes of the said clause.
2. This notification shall be effective from the assessment year 2025-26, subject to the condition that the assessee continues to be an authority constituted under the Uttar Pradesh Urban Planning and Development Act, 1973 (President’s Act No.11 of 1973) with one or more of the purposes specified in sub-clause (a) of clause (46A) of section 10 of the Income-tax Act.
[Notification No. 31 /2026/ F.No. 300195/45/2024-ITA-I]
HARDEV SINGH, Under Secy.
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect (with effect from the year of application made before the Board/Department) to this notification.
