NOIDA is now tax-free: Here's what it means for its residents and businesses
Critically, the exemption is conditional. NOIDA must maintain distinct records separating exempt from non-exempt income, and any deviation risks forfeiting the benefit.
- Jul 18, 2025,
- Updated Jul 18, 2025 1:59 PM IST
NOIDA will no longer pay income tax, following a sweeping exemption under Section 10(46A) of the Income Tax Act, effective from Assessment Year 2024–25.
The Central Board of Direct Taxes (CBDT) granted the exemption through Notification No. 116/2025, applying only to statutory public utility bodies like the New Okhla Industrial Development Authority (NOIDA) that carry out non-commercial functions.
The exemption, rooted in the Finance Bill 2023, ensures that income from public utility services—such as rent, fees, and government grants—will no longer be taxed. However, any commercial or profit-making activity by NOIDA remains fully taxable.
“This allows NOIDA to reinvest more of its earnings into infrastructure without tax leakage,” a senior official was quoted as saying in several media reports, aligning the move with similar tax reliefs extended to Sovereign Wealth Funds and Pension Funds supporting infrastructure.
For residents, the change could mean better roads, housing, transport, and drainage without the burden of higher local taxes. For businesses, it signals faster project approvals and enhanced industrial infrastructure—though their own tax obligations remain unchanged.
Critically, the exemption is conditional. NOIDA must maintain distinct records separating exempt from non-exempt income, and any deviation risks forfeiting the benefit.
The broader goal: enabling long-term, tax-efficient urban planning and strengthening the financial footing of India’s key development bodies.
NOIDA will no longer pay income tax, following a sweeping exemption under Section 10(46A) of the Income Tax Act, effective from Assessment Year 2024–25.
The Central Board of Direct Taxes (CBDT) granted the exemption through Notification No. 116/2025, applying only to statutory public utility bodies like the New Okhla Industrial Development Authority (NOIDA) that carry out non-commercial functions.
The exemption, rooted in the Finance Bill 2023, ensures that income from public utility services—such as rent, fees, and government grants—will no longer be taxed. However, any commercial or profit-making activity by NOIDA remains fully taxable.
“This allows NOIDA to reinvest more of its earnings into infrastructure without tax leakage,” a senior official was quoted as saying in several media reports, aligning the move with similar tax reliefs extended to Sovereign Wealth Funds and Pension Funds supporting infrastructure.
For residents, the change could mean better roads, housing, transport, and drainage without the burden of higher local taxes. For businesses, it signals faster project approvals and enhanced industrial infrastructure—though their own tax obligations remain unchanged.
Critically, the exemption is conditional. NOIDA must maintain distinct records separating exempt from non-exempt income, and any deviation risks forfeiting the benefit.
The broader goal: enabling long-term, tax-efficient urban planning and strengthening the financial footing of India’s key development bodies.