**Executive Summary**
This notification, issued by the Ministry of Finance on July 13, 2026, grants income tax exemptions to the Baddi Barotiwala Nalagarh Development Authority under the Income-tax Act, 1961, despite its repeal by the Income-tax Act, 2025. The exemption applies retrospectively to Assessment Years 2024-25, 2025-26, and 2026-27. The Authority must adhere to specific operational conditions to maintain this status and avoid penal actions.
**Key Points / Main Content**
**Legal Context and Transition**
* The Income-tax Act, 1961 was repealed by the Income-tax Act, 2025 (Section 536).
* Provisions of the 1961 Act continue to apply to proceedings pending as of the commencement of the 2025 Act or initiated on or after April 1, 2026, for prior tax years.
* Rights, liabilities, and orders issued under the 1961 Act remain valid and are governed by the procedures specified in the original Act.
**Specified Exempted Income**
The Baddi Barotiwala Nalagarh Development Authority (PAN AAALB0528J) is notified for exemption regarding the following income sources:
* Grants received from the Central Government or the State Government of Himachal Pradesh.
* Revenue receipts generated under the Himachal Pradesh Town and Country Planning Act, 1977.
* Interest earned on bank deposits.
**Mandatory Conditions for Exemption**
* **Commercial Activity:** The Authority is strictly prohibited from engaging in any commercial activity.
* **Consistency:** The nature of the Authority's activities and its specified income must remain unchanged throughout the relevant financial years.
* **Compliance:** The Authority must file income tax returns in accordance with section 139(4C)(g) of the Income-tax Act, 1961.
**Validity and Enforcement**
* The notification covers Assessment Years 2024-25, 2025-26, and 2026-27 (relevant to Financial Years 2023-24 to 2025-26).
* Failure to comply with prescribed conditions will result in the withdrawal of the exemption and the initiation of penal actions under the 1961 Act.
* The retrospective application of this notification is certified not to adversely affect the interests of any person.
**Impact Analysis**
**Baddi Barotiwala Nalagarh Development Authority**
**Impact**
The Authority is granted legal exemption from paying income tax on government grants, specific revenue receipts, and bank interest for the specified three-year period.
**Action Required**
The Authority must ensure it does not engage in commercial ventures, must maintain the nature of its activities as reported, and is required to formally file returns of income as per the 1961 Act provisions.
**Income Tax Authorities / Central Board of Direct Taxes (CBDT)**
**Impact**
The department is responsible for overseeing the transition between the 1961 and 2025 Acts for this specific entity and ensuring the exemption is applied correctly for the specified assessment years.
**Action Required**
Authorities must monitor the entity’s compliance with the "no commercial activity" clause and initiate penal proceedings or withdraw exemptions if the conditions are violated.
Key Entities Referenced
Baddi Barotiwala Nalagarh Development Authority: An authority constituted by the Himachal Pradesh State Government notified as the primary beneficiary of income tax exemptions on specified income.
Income-tax Act, 1961: The principal legislation under which Section 10(46) provides tax exemptions for specified income of certain notified bodies and authorities.
Income-tax Act, 2025: The repealing legislation whose Section 536 contains savings provisions that allow the continued application and enforcement of the Income-tax Act, 1961.
Central Board of Direct Taxes (CBDT): The regulatory body within the Ministry of Finance responsible for issuing this notification and overseeing direct tax exemptions.
Himachal Pradesh Town and Country Planning Act, 1977: The state law under which the notified Authority collects revenue receipts that are exempted from tax under this notification.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-13072026-274445
CG-DxLx-xEG-I1D3H0x7x2x0 26-274445
xxxGIDExxx
असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
सं. 3637] नई दिल्ली, सोमिार, िलु ाई 13, 2026/आषाढ 22, 1948
No. 3637] NEW DELHI, MONDAY, JULY 13, 2026/ASHADHA 22, 1948
जित्त मत्रं ालय
(रािस्ट्ि जिभाग)
(केंद्रीय प्रत्यक्ष कर बोडड)
अजधसचू ना
नई दिल्ली, 13 िुलाई, 2026
का.आ. 3799(अ).— िहााँ दक, आयकर अजधजनयम, 1961 (1961 का 43) की धारा 10 (46) में कजतपय जनकायों
या प्राजधकरणों या बोडों या रस्ट्टों या आयोगों की जनर्िडष्ट आय को छूट दिय ेिाने का प्रािधान दकया गया ह,ै जिन्ह ेंकेंद्र सरकार
द्वारा उस धारा के प्रयोिन के जलए सरकारी रािपत्र म ेंअजधसजू चत दकया िा सकता ह;ै
और िहााँ दक, आयकर अजधजनयम, 1961 (1961 का 43) को आयकर अजधजनयम, 2025 (2025 का 30) की धारा
536 (1) द्वारा जनरस्ट्त कर दिया गया ह;ै
और िहा ाँ दक, आयकर अजधजनयम, 2025 (2025 का 30) की धारा 536(2)(क) और (ख) म,ें अन्य बातों के साथ,
यह प्रािधान दकया गया ह ै दक आयकर अजधजनयम, 1961 (1961 का 43) (एतजममन् पश्चात जिसे 1961 का अजधजनयम
कहा गया ह)ै के जनरसन के बाििूि और उसकी उपधारा (4) के अधीन रहत े हुए, जनम्नजलजखत पर कोई भी प्रभाि नहीं
पडेगा,यथा;-
5271 GI/2026 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
(i) 1961 के अजधजनयम के प्रािधानों का पूिड प्रचालन और उसके तहत जिजधित रूप स े िारी दकया गया कोई
आिेि या दकया गया कोई काय;ड या
(ii) 1961 के अजधजनयम या उस अजधजनयम के तहत िारी आििे ों के अंतगडत प्राप्त, अर्ितड या उत्पन्न कोई भी
अजधकार, जििेषाजधकार, िाजयत्ि या िेनिारी;
और िहा ाँ दक, आयकर अजधजनयम, 2025 (2025 का30) की धारा 536(2)(ग) म ें यह प्रािधान ह ै दक 1961 के
अजधजनयम के प्रािधान आयकर अजधजनयम, 2025 (2025 का 30) के प्रारंभ होने की जतजथ को लंजबत दकसी भी कायडिाही
और 1 अप्रैल, 2026 के बाि िरूु की गई दकसी भी कायडिाही (जिसम ेंनोटटस, जनधाडरण, पनु जनधाडरण, पुनसणं ना, त्रुटट-सुधार,
िुमाडना, संिभड, पनु रीक्षण और अपील भी िाजमल ह)ैं पर 1 अप्रैल, 2026 स ेपहले िुरू होन ेिाले दकसी भी कर िषड के संबंध
में लागू होत े रहगें े और ऐसी कायडिाही 1961 के अजधजनयम म ेंजनर्िडष्ट प्रदिया के अनुसार पूरी की िाएगी;
और िहााँ दक, आयकर अजधजनयम, 2025 (2025 का 30) की धारा 536(2)(ङ) म ें यह प्रािधान ह ै दक इस
अजधजनयम के प्रारंभ होन े की जतजथ को दकसी आयकर प्राजधकरण या जनरस्ट्त आयकर अजधजनयम के तहत गटित दकसी अन्य
प्राजधकरण, अपीलीय न्यायाजधकरण या दकसी न्यायालय के समक्ष आिेिन, अपील, संिभ ड या पुनरीक्षण या दकसी अन्य रूप
में लंजबत कोई भी कायडिाही उसी प्रकार िारी रखी िाएगी और उसका जनपटान दकया िाएगा िैस े दक इस अजधजनयम को
अजधजनयजमत ही नहीं दकया गया ह;ै
अतः, अब, आयकर अजधजनयम, 2025 (2025 का 30) की धारा 536(2)(क) स े (ग) और (ङ) के प्रािधानों के
अनुपालन म,ें केंद्र सरकार, एतद्द्वारा, 1961 के अजधजनयम की धारा 10 (46) के प्रयोिनों के जलए, जहमाचल प्रििे राज्य
सरकार द्वारा गटित प्राजधकरण, "बद्दी बरोटीिाला नालागढ़ जिकास प्राजधकरण (पैन AAALB0528J)" को जनम्नजलजखत
जनर्िडष्ट आय के संबंध म ेंअजधसूजचत करती ह,ै यथा:-
(क) केंद्र सरकार या जहमाचल प्रिेि राज्य सरकार स ेप्राप्त अनुिान;
(ख) जहमाचल प्रििे नगर एि ं ग्राम जनयोिन अजधजनयम, 1977 (जहमाचल प्रिेि अजधजनयम 1977 का 12) के
अंतगतड रािस्ट्ि प्राजप्तयां; और
(ग) बैंक जमा पर अर्िडत ब्याज।
2. यह अजधसूचना दक इन ितों के अध्ययधीन प्रभािी होगी बद्दी बरोटीिाला नालागढ़ जिकास प्राजधकरण
(क) दकसी भी िाजणजज्यक गजतजिजध म ेंसंलग्न नहीं होगा;
(ख) इसकी गजतजिजधयााँ और जनर्िडष्ट आय की प्रकृजत परू े जित्तीय िषों के िौरान अपटरिर्तडत रहगें ी; तथा
(ग) यह 1961 के अजधजनयम की धारा 139(4ग) (छ) के प्रािधानों के अनुसार आय की जििरणी िाजखल करेगा।
3. इन ितों का पालन करन ेम ेंजिफलता की जस्ट्थजत म ें1961 के अजधजनयम के प्रािधानों के तहत िंडात्मक कारडिाई िरूु की
िाएगी और 1961 के अजधजनयम की धारा 10(46) के तहत िी गई छूट िापस ल ेली िाएगी।
4. यह अजधसूचना जित्तीय िष ड 2023-24, 2024-25 और 2025-26 के संगत जनधाडरण िषड 2024-25, 2025-26 और
2026-27 के जलए लागू होगी।
[स.ं 83 /2026/फा. स.ं 300196/45/2025-आईटीए-I]
हरिेि ससंह, अिर सजचि
स्ट्पष्टीकरण- ज्ञापन
प्रमाजणत दकया िाता ह ै दक इस अजधसूचना को पूिडव्यापी प्रभाि स े (बोड ड या आयकर जिभाग के समक्ष आिेिन
िाजखल करन े के िष ड स)े लागू करने स े दकसी भी व्यजि के जहतों पर कोई प्रजतकूल प्रभाि नहीं पड रहा ह।ै[भाग II—खण् ड 3(ii)] भारत का रािपत्र : असाधारण 3
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 13th July, 2026
S.O. 3799(E).— Whereas, section 10(46) of the Income-tax Act, 1961 (43 of 1961) provided for exemption of
specified income of certain bodies or authorities or Boards or Trusts or Commissions as may be notified by the Central
Government in the Official Gazette for the purposes of that section;
And whereas, the Income-tax Act, 1961 (43 of 1961) was repealed by section 536(1) of the Income-tax Act,
2025 (30 of 2025);
And whereas, section 536(2)(a) and (b) of the Income-tax Act, 2025 (30 of 2025), inter alia, provides that
irrespective of the repeal of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Act of 1961) and
subject to sub-section (4) thereof, nothing shall affect-
(i) the previous operation of the provisions of the Act of 1961 and any order or anything duly done or
suffered thereunder; or
(ii) any right, privilege, obligation or liability acquired, accrued or incurred under the Act of 1961 or orders
under that Act;
And whereas, section 536(2)(c) of the Income-tax Act, 2025 (30 of 2025) provides that the provisions of the
Act of 1961 shall continue to apply to any proceeding pending on the date of commencement of the Income-tax Act,
2025 (30 of 2025) and to any proceedings initiated on or after the 1st April, 2026 (including notices, assessment,
reassessment, recomputation, rectification, penalty, reference, revision and appeals) in respect of any tax year beginning
before the 1st April, 2026 and such proceedings shall be carried out as per the procedure specified in the Act of 1961;
And whereas, section 536(2)(e) of the Income-tax Act, 2025 (30 of 2025) provides that any proceeding pending
on the date of its commencement before any income-tax authority or any other authority constituted under the repealed
Income-tax Act, Appellate Tribunal, or any court, by way of application, appeal, reference or revision or by any other
means, shall be continued and disposed of as if this Act had not been enacted;
Now, therefore, in pursuance of the provisions of section 536(2)(a) to (c) and (e) of the Income-tax Act, 2025
(30 of 2025), the Central Government hereby notifies, for the purposes of section 10(46) of the Act of 1961, “Baddi
Barotiwala Nalagarh Development Authority (PAN AAALB0528J)", an authority constituted by the State Government
of Himachal Pradesh, in respect of the following specified income arising to that Authority, namely:-
(a) grants received from the Central Government or the State Government of Himachal Pradesh;
(b) revenue receipts under the Himachal Pradesh Town and Country Planning Act, 1977 (Himachal
Pradesh Act 12 of 1977) ; and
(c) interest on bank deposits.
2. This notification shall be effective subject to the conditions that the Baddi Barotiwala Nalagarh Development
Authority-
(a) shall not engage in any commercial activity;
(b) its 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 provisions of section 139(4C) (g) of the Act
of 1961.
3. Failure to comply with these conditions shall result in the initiation of penal actions under the provisions of the Act
of 1961, and withdrawal of exemption granted under section 10(46) of the Act of 1961.
4. This notification shall be deemed to have been applied for the assessment years 2024-25, 2025-26 and 2026-27
relevant to the financial years 2023-24, 2024-25 and 2025-26.
[No. 83 /2026/F. No. 300196/45/2025-ITA-I)]
HARDEV SINGH, Under Secy.
Explanatory Memorandum
It is certified that the interests of no person are being adversely affected by giving retrospective effect
[with effect from the year of application filed before the Board or Income tax Department] to this notification.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.