Section 10(23BBC): Income Tax Exemption for the SAARC Fund for Regional Projects
Section 10(23BBC) of the Income-tax Act, 1961 specifically exempted income of the SAARC Fund for Regional Projects, a regional cooperation fund established under the Colombo Declaration of 21 December 1991.
Eligible entity: SAARC Fund for Regional Projects.
Nature of income: Any income of the specified fund.
Amount exempt: Entire qualifying income; the clause specifies no separate monetary ceiling.
Establishment: Colombo Declaration issued on 21 December 1991.
What does Section 10(23BBC) mean?
Section 10 of the Income-tax Act, 1961 lists incomes excluded from the computation of total income. Under clause 10(23BBC), any income of the SAARC Fund for Regional Projects set up by the Colombo Declaration issued on 21 December 1991 was exempt from income tax, subject to the applicable statutory framework.
The provision is entity-specific. It identifies a particular fund and does not create a general exemption for every organisation working in South Asia, every SAARC initiative, or every recipient of project assistance.
Eligibility, income and exemption amount
| Eligible assessee | The SAARC Fund for Regional Projects identified in the statutory clause. |
|---|---|
| Statutory basis | Section 10(23BBC), Income-tax Act, 1961, for periods to which that Act applies. |
| Nature of exempt income | Any income belonging to the specified fund, including income arising in its own capacity, where the statutory identity is established. |
| Extent of exemption | Entire qualifying income; no separate amount-based cap is stated in the clause. |
| Principal condition | The entity must be the fund set up under the Colombo Declaration dated 21 December 1991. |
Important terms and legal context
SAARC
The South Asian Association for Regional Cooperation (SAARC) is a regional intergovernmental association established to promote cooperation among South Asian countries. A reference to SAARC alone does not confer an Indian income-tax exemption.
SAARC Fund for Regional Projects
This is the specific fund identified by Section 10(23BBC). Its identity and constitutive documents are central to determining whether a receipt belongs to the exempt entity.
Colombo Declaration, 21 December 1991
The statutory provision identifies the fund by reference to the Colombo Declaration issued on this date. This historical instrument distinguishes the fund from other regional development funds and projects.
Conditions for claiming exemption
- Correct fund: The claimant must be the SAARC Fund for Regional Projects referred to in Section 10(23BBC).
- Historical establishment: Its establishment must be traceable to the Colombo Declaration of 21 December 1991.
- Income of the fund: The income must belong to the qualifying fund, rather than to a separate implementing agency, contractor or beneficiary.
- Supporting evidence: Constitutive documents, audited financial statements, bank records and other records should substantiate the fund's identity and ownership of income.
Scope of exemption: A grant, payment or contract involving a SAARC project is not automatically exempt in the hands of the recipient. The tax treatment of a separate person or organisation must be considered independently.
Illustrative application
Example 1: Investment income legally belonging to the fund described in Section 10(23BBC) falls within the wording of the exemption for an applicable year under the 1961 Act.
Example 2: A private consultant earns fees for work on a SAARC-supported regional project. Those fees are not exempt merely because the project is associated with SAARC.
Example 3: A different regional fund uses the words "SAARC" or "regional projects" in its name. Its eligibility cannot be assumed without showing that it is the specific statutory fund.
Income-tax Act, 2025 and current applicability
The provision discussed above is identified by its historic numbering in the Income-tax Act, 1961. The Income-tax Act, 2025 came into force on 1 April 2026. For tax year 2026-27 and later, review the corresponding provisions of the new Act, applicable amendments and transitional rules. Do not rely on the old section number alone when preparing a current-year return or legal opinion.
Frequently asked questions
What is Section 10(23BBC)?
It is the exemption for any income of the SAARC Fund for Regional Projects established under the Colombo Declaration dated 21 December 1991.
Who can claim this exemption?
The specific fund named in the provision. Other organisations do not qualify merely because they carry out SAARC-related activities.
Is the exemption limited to interest or grants?
No such category restriction appears in the wording "any income" of the specified fund, although the fund's identity and ownership of the income must be established.
Is the 1961 Act section number sufficient for 2026-27?
No. For tax years beginning on or after 1 April 2026, consult the Income-tax Act, 2025 and applicable transitional provisions.
Official legislation and reference links
- Income Tax Department: Income-tax Act, 1961 (Section 10, clause 23BBC, for applicable earlier years).
- India Code: official central legislation database (consult the Income-tax Act, 2025 and amendments).
- Income Tax Department: statutory material and circulars.
- Income Tax e-Filing Portal.
This article is a general statutory overview. The applicable tax year, current legislative text and identity of the fund determine the legal result.