CBDT Grants Income Tax Exemption to Karnataka State Pollution Control Board [Read Notification]
The CBDT clarified through an explanatory memorandum that giving this notification retrospective effect would not adversely impact any taxpayer.
![CBDT Grants Income Tax Exemption to Karnataka State Pollution Control Board [Read Notification]](https://images.taxscan.in/h-upload/2025/07/04/2058885-karnataka-state-pollution-control-board.webp "CBDT Grants Income Tax Exemption to Karnataka State Pollution Control Board [Read Notification]")
The Central Board of Direct Taxes ( CBDT ), through a recent notification dated July 2, 2025, has granted income tax exemption to the Karnataka State Pollution Control Board (KSPCB) under Section 10(46) of the Income-tax Act, 1961. The exemption applies to specific categories of income generated by the Board in the course of its statutory functions related to environmental...
The Central Board of Direct Taxes ( CBDT ), through a recent notification dated July 2, 2025, has granted income tax exemption to the Karnataka State Pollution Control Board (KSPCB) under Section 10(46) of the Income-tax Act, 1961.
The exemption applies to specific categories of income generated by the Board in the course of its statutory functions related to environmental regulation and protection. The following are the income:
(i) Collection of Consent fees as notified by the Government of Karnataka in accordance with the Water (Prevention & Control of Pollution) Act, 1974, the Air (Prevention & Control of Pollution) Act, 1981 from Industries established in the State of Karnataka.
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(ii) Collection of water and air analysis charges as notified by the Government of Karnataka in accordance with the Water (Prevention & Control of Pollution) Act, 1974, the Air (Prevention & Control of Pollution) Act, 1981 from Industries established in the State of Karnataka.
(iii) Environmental Compensation fees.
(iv) Any fees or income relevant to environment protection, water and air prevention and control of pollution shall be notified by the Government of Karnataka and the Central Pollution Control Board from time to time.
(v) Grants/Subsidy/financial assistance/reimbursements by whatever name received from the Central Government, State Government, Central Pollution Control Board or from any other Govt. agencies/departments on account of relevant activities notified the concerned Govt. department.
(vi) Interest income arising out of above.
(vii) Miscellaneous income incidental to the core-activities i.e. sale of scrap, miscellaneous income, tender application fees, liquidated damages, RTI Fees.
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However, the exemption is subject to three conditions:
- The KSPCB shall not engage in any commercial activity.
- The nature of its specified income must remain unchanged.
- It must file income tax returns as mandated under Section 139(4C)(g) of the Income-tax Act.
The exemption will be applicable for assessment years 2024-25 and 2025-26 (covering financial years 2023-24 and 2024-25) and will continue to apply from AY 2026-27 to 2028-29, corresponding to FYs 2025-26 to 2027-28.
The CBDT also clarified through an explanatory memorandum that giving this notification retrospective effect would not adversely impact any taxpayer.
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