NOIDA has now been given a new status; it’s officially “tax-free.” But what does that mean for the city, its businesses, and its people? The news has caught the attention of builders, shopkeepers, and investors.

The Central Board of Direct Taxes (CBDT) recently announced that the New Okhla Industrial Development Authority (NOIDA) will not have to pay income tax under Section 10(46A) of the Income Tax Act. This rule applies starting from the 2024–25 assessment year.

However, CA (Dr) Suresh Surana says there’s more to understand. In a press note released on July 17, 2025, the CBDT explained that this tax-free status will only continue if NOIDA remains an authority formed under the Uttar Pradesh Industrial Area Development Act of 1976 and continues to serve the specific purposes mentioned in the tax law.

What does “Tax-Free” mean for NOIDA?

NOIDA has been given a “tax-free” status, but many people are confused about what that means. So let’s break it down simply.

Tax expert Dr. Suresh Surana explained that this “tax-free” tag applies only to income tax. It doesn’t mean that NOIDA is free from all types of taxes. The exemption is given to help NOIDA focus on public development, like building roads, parks, and providing better services, by saving money on income tax.

This means NOIDA won’t have to pay tax on the income it earns through rent, fees, or grants, as long as it continues doing work for the public good under the law it was created with. However, NOIDA will still collect other fees from people or businesses, and may still have to pay otherkinds of taxes or levies.

How businesses in NOIDA may benefit

This tax relief is mainly for the NOIDA authority, not for private companies. But businesses operating in the area may benefit indirectly.

Here’s how

With more money saved, NOIDA can spend more on better roads, water supply, public transport, and other civic work. Faster approvals and improved infrastructure could mean easier and smoother business operations. Over time, this may attract more investors and help grow industries and jobs in the area. So, even if companies don’t get a direct tax break, they could still benefit from a better business environment.

How long will this tax-free Status last?

There’s no set expiry date for this relief. It will continue as long as NOIDA follows its legal duties of working for the public under the 1976 law that governs it. If NOIDA ever stops doing that or changes its role, this tax benefit could be removed.

Why it’s important for NOIDA

This move could make NOIDA more attractive to businesses and investors, especially when cities are competing hard to grow. If NOIDA uses this saved money wisely, it could mean: Faster project clearances, better services for companies and residents, cleaner and smarter urban development. So, while it’s not a full “free from tax” pass, it’s still a big step that could help NOIDA grow faster and become a better place to live and work.