The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, has notified the Telangana State Pollution Control Board (TSPCB) as a tax-exempt entity under clause (46) of section 10 of the Income-tax Act, 1961. The notification, issued via S.O. 2122(E) dated May 13, 2025, exempts specified categories of income earned by the Board from income tax for multiple financial years.
The TSPCB (PAN: AAAGT0080Q), constituted under the Water (Prevention and Control of Pollution) Act, 1974 by the State Government of Telangana, plays a critical role in environmental regulation and monitoring across the state.
Tax-Exempt Income Categories Include
- Consent fees under the Water and Air (Prevention and Control of Pollution) Acts
- Analysis fees, air ambient quality and noise level survey fees
- Reimbursements from the Central Pollution Control Board for national monitoring programmes
- Authorisation and cess appeal fees
- Government grants (both State and Central)
- RTI fees and miscellaneous income (e.g., tender fees)
- Penalties for environmental non-compliance
- Interest earned on staff loans, advances, and other exempt categories
Conditions for Exemption
To maintain its exempt status, the TSPCB must:
- Avoid engaging in any commercial activity
- Ensure the nature of income and activities remains unchanged
- File income tax returns under section 139(4C)(g) of the Income Tax Act
Applicable Financial Years
The exemption applies retrospectively from FY 2021-22 to FY 2024-25 and prospectively to FY 2025-26.
This move provides fiscal support to the Board, helping it strengthen its environmental protection initiatives without the burden of income tax on operational revenues.
Official copy of the notification has been mentioned below
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 13th May, 2025
S.O. 2122(E).- In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961
(43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the ‘Telangana State Pollution Control Board’ (PAN AAAGT0080Q), a Board constituted by the State Government of Telangana under Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974), in respect of the following specified income arising to that Board, namely:-
(a) consent fees received under the Water (Prevention & Control of Pollution) Act, 1974 (6 of 1974) and Air (Prevention & Control of Pollution) Act, 1981 (14 of 1981);
(b) analysis fees or air ambient quality survey fees or noise level survey fees;
(c) reimbursement of the expense received from Central Pollution Control Board towards National Water Quality Monitoring Programme and National Air Quality Monitoring Programme like schemes;
(d) authorisation fees;
(e) cess reimbursement and cess appeal fees;
(f) grants from State or Central Governments;
(g) fees received under the Right to Information Act, 2005 (22 of 2005);
(h) interest on loans and advances given to staff ;
(i) miscellaneous income like tenders fees etc.;
(j) penalties for non-compliance and invoking of Bank Guarantees; and
(k) interest earned on (a) to (j) above.
2. This notification shall be effective subject to the conditions that Telangana State Pollution Control Board,-
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial
years; and
(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section
139 of the Income-tax Act, 1961.
3. This notification shall be deemed to have been applied for financial years 2021-22, 2022-23, 2023-24, 2024-
25 and shall also apply with respect to the financial year 2025-26.
[Notification No. 47 /2025/F. No. 300196/11/2023-ITA-I]
CASTRO JAYAPRAKASH T., Under Secy.
Explanatory Memorandum
It is certified that no person is being affected adversely by giving retrospective effect to this notification
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