CBDT exempts Specified Income of Forum of Regulators from Taxation [Read Notification]

In a significant move aimed at supporting regulatory bodies in India, the Central Board of Direct Taxes (CBDT) has granted income tax exemption to the Forum of Regulators (FoR). The exemption, notified under Section 10(46) of the Income-tax Act, 1961, covers specified income of the Forum for the financial years from 2011–12 to 2015–16, applying retrospectively.

The Forum of Regulators, established under the Ministry of Power as per the Electricity Act, 2003, is a collaborative platform comprising Central and State Electricity Regulatory Commissions. It plays a pivotal role in streamlining regulatory frameworks, promoting capacity building, and enhancing transparency within the sector. The CBDT’s notification officially exempts the Forum’s income derived from grants, membership fees, and interest on deposits from income taxation, recognizing its non-commercial and public interest objectives.

This exemption primarily covers funds received through government grants, contributions from member commissions, and bank interest earnings, all of which are essential for the Forum to carry out its mandate effectively. The decision reflects the government’s acknowledgment of the Forum’s crucial role in ensuring regulatory consistency and fostering development in the power sector.

The exemption is subject to conditions that require the Forum to engage solely in non-commercial activities and maintain the nature of its income and operations during the exempted financial years. Additionally, the Forum must comply with income tax return filing obligations specific to its status under the Income-tax Act. Importantly, the CBDT’s notification ensures that this tax relief is applied retrospectively, covering earlier years and providing clarity to the Forum and related stakeholders.

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