The Central Board of Direct Taxes (CBDT) has notified the Fees Regulating Authority (PAN: AAAJF0167B), constituted by the Government of Maharashtra, for exemption under Section 10(46) of the Income-tax Act, 1961. The notification was issued by the Ministry of Finance on July 27, 2026.
The move provides tax exemption on specified income earned by the authority and ensures continuity of benefits even after the repeal of the Income-tax Act, 1961 and the introduction of the Income-tax Act, 2025.
What Income Will Be Exempt?
According to Notification No. 98/2026, the exemption applies to the following categories of income earned by the Fees Regulating Authority:
- Processing fees, interest, penalties, and other charges payable by private professional educational institutions.
- Reimbursements and grants received from the Government of Maharashtra.
- Interest income earned from bank deposits and other investments.
Conditions for Availing the Exemption
The tax exemption is subject to compliance with certain conditions. The Fees Regulating Authority must:
- Not engage in any commercial activity.
- Ensure that its activities and the nature of the specified income remain unchanged during the relevant financial years.
- File its income tax return in accordance with Section 139(4C)(g) of the Income-tax Act, 1961.
The notification further states that any failure to comply with these conditions may result in penal action and withdrawal of the exemption granted under Section 10(46).
Applicability of the Exemption
The CBDT has granted the benefit retrospectively. The exemption will apply for:
| Assessment Year | Financial Year |
|---|---|
| AY 2022-23 | FY 2021-22 |
| AY 2023-24 | FY 2022-23 |
| AY 2024-25 | FY 2023-24 |
| AY 2025-26 | FY 2024-25 |
| AY 2026-27 | FY 2025-26 |
The explanatory memorandum accompanying the notification clarifies that granting retrospective effect does not adversely affect the interests of any person.
Why This Notification Matters
Section 10(46) provides income tax exemption to specified statutory bodies, authorities, boards, trusts, and commissions that perform public functions and are notified by the Central Government. The latest notification ensures that the Maharashtra Fees Regulating Authority can continue carrying out its regulatory role in the education sector without tax liability on its specified income streams.
The notification also reflects the transition provisions contained in Section 536 of the Income-tax Act, 2025, which preserve rights, exemptions, and ongoing proceedings relating to periods governed by the repealed Income-tax Act, 1961.
Official Notification
The notification was issued as S.O. 4120(E) dated July 27, 2026, by the Ministry of Finance (Department of Revenue), CBDT.
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