CBDT Grants Tax Exemption to AICTE on Government Grants, Fees and Deposits Under Section 10(46) [Read Notification]

CBDT Grants Tax Exemption to AICTE on Government Grants, Fees and Deposits Under Section 10(46) [Read Notification]

The Ministry of Finance (Department of Revenue), Central Board of Direct Taxes (CBDT) has recently issued an official notification [No. 128/2025], dated August 01, 2025, informing that the Central Government has declared the “All India Council for Technical Education (AICTE), New Delhi,” a statutory council set up by the Central Government [PAN: AAAJA1571E], exempt from paying income tax. The government has taken this action in exercise of its powers granted under clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961).

Section 10(46) of the Income Tax Act allows the Central Government to declare that certain incomes of specific government-authorised bodies or authorities are exempt from income tax under certain conditions.

The government has also specified the types of income of the AICTE that will be exempted from income tax:

• Grants or subsidies received from the government or other government bodies.
• Regulatory charges collected from educational institutions or others under its authority.
• Fees received under the Right to Information (RTI) Act or as examination fees.
• Fees collected from CMAT (Common Management Admission Test) and GPAT (Graduate Pharmacy Aptitude Test).
• Interest earned on its bank deposits.
• Any other miscellaneous charges or receipts (minor income not covered above).

The government has also specified three conditions under which AICTE will continue to enjoy tax exemption under Section 10 of the Income-tax Act, 1961. These conditions are as follows:

• No Commercial Activity: AICTE must not engage in any profit-making or commercial business activity.
• Income Nature Must Not Change: The types of income mentioned above must remain the same in the coming financial years. They can’t add new commercial incomes and still expect to be exempt.
• Must File Income Tax Returns: Even though they are exempt, AICTE still has to file their income tax return under Section 139(4C)(g), which applies to such exempt institutions.

This exemption will be made applicable to past years, Assessment Years 2024-25 and 2025-26, and future years, from Assessment Year 2026-27 to 2028-29.