FSSAI granted income tax exemption under Section 10(46A), effective FY26

The Food Safety and Standards Authority of India (FSSAI) has been granted a significant tax relief under Section 10(46A) of the Income Tax Act, 1961, exempting it from paying income tax on key revenue streams effective April 1, 2025.

The exemption was formalized via notification dated June 24, 2025, and communicated through an internal circular issued by the authority on June 30.

"In exercise of the powers conferred by sub-clause (b) of clause (46A) of section 10 of the Income-tax Act, 1961 (43 of 1961), (hereinafter referred to as “the Income-tax Act”), the Central Government hereby notifies “Food Safety and Standards Authority of India” (PAN: AAAGF0023K) (hereinafter referred to as “the assessee”), an authority constituted under the Food Safety and Standards Act, 2006 (34 of 2006), for the purposes of the said clause.

This notification shall be effective from the assessment year 2026-2027, subject to the condition that the assessee continues to be an authority constituted under the Food Safety and Standards Act, 2006 (34 of 2006) with one or more of the purposes specified in sub-clause (a) of clause (46A) of section 10 of the Income-tax Act."

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According to the circular, the exemption covers four key categories of income for FSSAI: grants-in-aid received from the Ministry of Health and Family Welfare; statutory fees such as license and registration fees, and charges for food sample analysis or testing as per the Food Safety and Standards Act, 2006; penalties imposed under the same Act; and any income generated from these sources.

The notification, issued by the Central Board of Direct Taxes (CBDT), specifies that the exemption is effective from Assessment Year 2026–27 and is subject to the condition that FSSAI continues to function under the statutory framework of the Food Safety and Standards Act, 2006. It also reaffirms FSSAI’s status as a public authority serving a specified public purpose under the Income Tax Act.

As a procedural follow-up, FSSAI has advised that any banks deducting tax at source (TDS) on its fixed deposits must be instructed to stop doing so with immediate effect, citing the new exemption status.

Established in 2008 under the Food Safety and Standards Act, FSSAI is the apex body responsible for regulating and supervising food safety in India.

Section 10(46A) of the Income Tax Act is a relatively recent provision introduced to exempt certain public authorities from income tax, provided they are not engaged in commercial activities and operate in the public interest.