The Ministry of Finance, through the Central Board of Direct Taxes (CBDT), issued Notification No. 35/2026 dated March 27, 2026, granting income tax exemption under Section 10(46) of the Income-tax Act, 1961 to a state education board. The exemption applies to specified income, including government grants, statutory fees and receipts, and interest earned on bank deposits and investments. The benefit is subject to strict conditions, notably that the board must not engage in any commercial activity, the nature of its income must remain consistent, and it must file income tax returns as prescribed under the Act. Non-compliance may lead to withdrawal of exemption and penal consequences. The notification is effective for Assessment Years 2024–25 to 2028–29, with retrospective applicability aligned to the application date. This move clarifies the tax treatment of educational boards and reinforces exemption eligibility for entities engaged in non-commercial public educational functions.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 35/2026 – Income Tax | Dated: 27th March, 2026
S.O. 1625(E).— In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, `Goa Board of Secondary and Higher Secondary Education, Goa’ (PAN: AAALT1048H), a Board constituted by the Goa, Daman and Diu Secondary and Higher Secondary Education Board Act, 19754 and Rules, 1975, passed by the Legislative of Goa of Goa, Daman and Diu in respect of the following specified income arising to that Board, namely:-
(a) Grants received from Central Government and State Government of Goa;
(b) Fees / Income/ Moneys received as per the Goa, Daman and Diu Secondary and High Secondary Education Board Act, 1975 and Rules, 1975; and
(c) Interest on bank deposits an d investments.
2. This notification shall be effective subject to the conditions that ‘Goa Board of Secondary and Higher Secondary Education, Goa’ –
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial year; and
(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
2.1 Failure to comply with these conditions may result in the initiation of penal actions under the provisions of the Income-tax Act, 1961 and withdrawal of the exemption granted u/s 10(46) of the Act.
3. This notification shall be applicable for the assessment years 2024-25 to 2028-29 relevant for the financial years 2023-24 to 2027-28.
[NOTIFICATION No. 35/2026/F.No.300196/52/2024-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 CBDT / Department) to this Notification.
