The Ministry of Finance, through the Central Board of Direct Taxes, has issued Notification No. 134/2025, which grants income tax exemption to the Tamil Nadu Electricity Regulatory Commission (TNERC). This exemption, made under clause (46) of section 10 of the Income-tax Act, 1961, applies to specific types of income earned by the commission. These include government grants, fees and penalties levied under the Electricity Act, 2003, and interest earned from bank deposits. The notification is subject to three conditions: TNERC must not engage in any commercial activity, its activities and specified income sources must remain unchanged, and it must file its income tax returns as per the relevant section of the Income-tax Act. While the notification was issued on August 19, 2025, it has been given retrospective effect, applying from the financial year 2022-2023. An explanatory memorandum attached to the notification confirms that this retrospective application will not adversely affect any person.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 134/2025- Income Tax | Dated: 19th August, 2025
S.O. 3796(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, ‘Tamil Nadu Electricity Regulatory Commission’ (PAN AAAGT0048J), a body constituted by the Government of Tamil Nadu, in respect of the following specified income arising to that Commission, namely:-
(a) Amount received in the form of Government Grants;
(b) Fees levied under clause (g) of sub-section (1) of Section 86 read with Section 181 of the Electricity Act, 2003;
(c) Penalties levied u/s 146 of the Electricity Act, 2003;
(d) Interest earned on bank deposits.
2. This notification shall be effective subject to the conditions that ‘Tamil Nadu Electricity Regulatory Commission’-
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; 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.
3. This notification shall be deemed to have been applied for the financial year 2022-2023 relevant to assessment year 2023-2024.
[Notification No. 134/2025/F. No. 196/86/2024-ITA-I]
MEENAKSHI SINGH, Dy. Secy.
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect to this notification.
