The National Mission for Clean Ganga (NMCG) reached an important milestone when the Central Board of Direct Taxes (CBDT) officially recognized it as a “government authority” under Section 10(46) of the Income Tax Act, 1961. This happened on March 26, 2024, through Notification No. 36/2024. As a result, NMCG no longer has to pay income tax on several types of income, especially interest from bank deposits and grants-in-aid from the Indian government.
On April 22, 2025, a notification was issued stating that any revenue received by a body, authority, board, trust, or commission (that is not a company) created under a Central or State Act for specific purposes is exempt from taxes.
Background and Taxation Challenges
NMCG registered as a society on August 12, 2011, under the Societies Registration Act of 1860. At first, it was taxed like an Association of Persons (AOP) because it had a PAN under that category. However, even after it was upgraded to “authority” status in October 2016 under the Environment (Protection) Act, 1986, its tax records didn’t reflect this change.
As a result, NMCG faced several problems, including tax notices and demands. For example, the Income Tax Department demanded ₹243.74 crore for the fiscal year 2021–2022, mostly because it treated interest earned on grants as taxable income.
Facing heavy tax liabilities that affected its functioning, NMCG asked the authorities to update its status and grant tax relief.
Consequences of the New Status
Thanks to the latest announcement, NMCG can now focus on its work without worrying about heavy tax bills draining its resources.
- NMCG doesn’t have to pay income tax on grants it receives from the Indian government.
- It also doesn’t have to pay tax on the interest earned from these grants, as long as it uses the money for the same purpose.
This decision brings clarity and consistency to NMCG’s financial management. It ensures that all funds meant for restoring the Ganga are used fully for that purpose, without being reduced by taxes.
Project officials have welcomed the move, saying it will help with better financial planning and smoother operations. Moreover, it shows the government’s strong commitment to the Namami Gange Programme, which began in 2015 to clean and protect the Ganga River.
Present Developments and Prospects
By October 2023, NMCG had approved around 450 projects worth ₹38,022 crore, and it had already spent about ₹17,622 crore. These projects cover areas like sewage treatment, river surface cleaning, rural sanitation, afforestation, biodiversity conservation, and public awareness.
Now that the tax burden is gone, NMCG can boost its efforts even further. With more financial freedom, it can manage both current and upcoming projects more effectively.
This decision also sets a positive example for other government-backed environmental and social welfare programs that may seek similar tax exemptions in the future.
Final Thoughts
Recognizing NMCG as a government authority under the Income Tax Act marks a major step in supporting environmental protection efforts. With this move, the government has reinforced its commitment to cleaning the Ganga by ensuring steady funding for the mission.
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