CBDT grants Income Tax Exemption u/s 10(46A) to Karnataka Electricity Regulatory Commission Subject to Condition [Read Notification]

The Central Board of Direct Taxes ( CBDT ) has notified income tax exemption to the Karnataka Electricity Regulatory Commission (KERC), Bengaluru, under the clause (46A) of Section 10 of the Income-tax Act, 1961.

Subclause (b) of clause (46A) of Section 10 of the Income-tax Act has been used to provide the exemption. Established by the electrical Act of 2003, the KERC is in charge of regulating the Karnataka electrical industry, which includes setting charges.

Know Practical Aspects of Tax Planning, Click Here

According to the notification, the exemption is conditional. It will remain effective only as long as KERC continues to be constituted under the Electricity Act, 2003, and is engaged in one or more functions specified in sub-clause (a) of clause (46A) of the Income-tax Act. These typically include regulatory functions in public interest that are non-commercial in nature.

The notification states that “This notification shall be effective from the assessment year 2025-26, subject to the condition that the assessee continues to be a commission constituted under „The Electricity Act, 2003‟ (No.36 of 2003) with one or more of the purposes specified in sub-clause (a) of clause (46A) of section 10 of the Income-tax Act.”

Want a deeper insight into the Income Tax Bill, 2025? Click here

Any income received by a body, authority, board, trust, or commission that is not a corporation and that has been created or constituted by a Central or State Act for specific objectives is free from taxation under Section 10(46A). Such a body, authority, board, trust, or commission must be notified by the central government in the official gazette in order to be eligible for an exemption.

The exemption will be applicable from the assessment year 2025-26 onwards.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates