Exemption Notification under section 10(46) of the Income Tax Act, 1961 in the case of Tamil Nadu e Governance Agency
The Central Government, by Notification No. 13/2026 dated 21 January 2026, has granted income-tax exemption under Section 10(46) of the Income-tax Act, 1961 to the Tamil Nadu e-Governance Agency for specified categories of income arising from its public e-governance functions. The exempt income includes recurring government grants for operational expenditure, service charges collected through Common Service Centres for citizen services, fees from software development and IT consultancy projects undertaken for government bodies, dividends from CSC e-Governance Services India Limited, administrative costs linked to UIDAI enrolment activities as registrar for Unique Identification Authority of India, revenue sharing from conducting online examinations, incidental income aligned with its objectives, and interest earned on all such receipts. The exemption is conditional on the agency not engaging in commercial activity, maintaining the same nature of activities and income, and filing returns under Section 139(4C). Non-compliance may lead to penalties and withdrawal of exemption. The notification applies retrospectively from AY 2024–25 and prospectively up to AY 2028–29, with no adverse impact certified.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 13/2026-Income Tax | Dated: 21st January, 2026
S.O. 334(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 e-Governance Agency’,(PAN:AABTT6381N) an agency formed by the State Government of Tamil Nadu, in respect of the following specified income arising to that Authority, namely:-
(a) Amount received in the form of recurring contributions/Grants-in-aid from Governments including Government of Tamil Nadu and specified authorities, if any, towards current operational expenditure;
(b) Service charges received through Common Service Centre’s for offering online services to citizens;
(c) Service charges for the software development projects and IT consultancies rendered for Other State Government Departments/Public Sector Undertakings/Statutory Boards and interest earned on sources of funds received in advance, pending disbursements, from time to time towards various projects sponsored;
(d) Dividend received from CSC e-Governance Services India Limited (CSC-SPV);
(e) Admin cost on PEC grants released by UIDAI to enrolment Agencies through Tamil Nadu e-Governance Agency which is functioning as enrolment Registrar;
(f) Revenue sharing on conducting online examination for other State Government Departments/Public Sector Undertakings/Statutory Boards;
(g) Any other income that may arise in future incidental to/furtherance of the objects of the society; and
(h) Interest earned on (a) to (g) above.
2. This notification shall be effective subject to the conditions that Tamil Nadu e-Governance Agency, Chennai Authority: –
(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.
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 exemption granted u/s 10(46) of the Act.
3. This notification shall be deemed to have been applied for the period of assessment year 2024-2025, 2025-26 and shall apply with respect to the assessment year 2026-2027, 2027-2028 and 2028-2029.
[Notification No. 13/2026/F. No. 300196/38/2024-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.
