Ref: Notification No. 70/2026 | S.O. 2768(E) | Dated: 1st June, 2026
The Central Board of Direct Taxes (CBDT), vide Notification No. 70/2026, has exercised its power under Section 11(5) read with Note 5(d)(ii) of Schedule V [Table: Sl. No. 7] of the Income-tax Act, 2025 to expand the scope of businesses that qualify as “eligible infrastructure entities” for income tax exemption purposes. The notification came into force on the date of its publication in the Official Gazette, i.e., 1st June, 2026.
You can track this and other CBDT notifications on TaxRoutine’s Notifications and Circulars page.
The Statutory Framework: Section 11 and Schedule V
To appreciate the significance of this notification, a brief look at the statutory architecture is necessary.
Section 11(1) of the Income Tax Act, 2025 provides that income enumerated in Schedules II, III, IV, V, VI, and VII shall not be included in computing the total income of a person for a tax year — but only if the conditions specified in those Schedules are satisfied. In other words, Schedule V houses a set of income categories that are exempt from tax, subject to conditions.
Schedule V, Table, Sl. No. 7 covers income of an eligible infrastructure entity. The term is defined under Note 5(d) to that Schedule as a company, enterprise, or entity carrying on:
- (i) the business of developing, or operating and maintaining, or developing, operating and maintaining, an infrastructure facility as defined in Section 138 of the Act; or
- (ii) such other business as the Central Government may, by notification, specify.
Limb (i) is self-contained — it tracks the Section 138 definition of infrastructure facility. Limb (ii) is a delegated legislation window: it empowers the Central Government to bring additional businesses within the ambit of “eligible infrastructure entity” by issuing a notification.
Notification No. 70/2026 exercises precisely this limb (ii) power.
What Notification No. 70/2026 Does
The notification specifies that businesses (other than those already covered under Note 5(d)(i)) that are engaged in infrastructure sub-sectors mentioned in the Updated Harmonised Master List (HML) of Infrastructure Sub-sectors shall be treated as eligible infrastructure entities for Schedule V, Sl. No. 7 purposes.
The Updated HML referred to here is the one notified by the Ministry of Finance, Department of Economic Affairs, vide F.No. 13/1/2025-IPP dated 19th September, 2025, published in the Gazette of India, Extraordinary, Part I, Section 1.
In plain terms: if a business operates in an infrastructure sub-sector listed in that DEA notification — and is not already covered by the Section 138 definition — it now qualifies as an eligible infrastructure entity and can claim the Schedule V, Sl. No. 7 exemption, provided all other conditions are met.
Why This Matters: The HML Connection
The Harmonised Master List of Infrastructure Sub-sectors has historically been the government’s primary tool for defining what counts as “infrastructure” across regulatory and financing frameworks — used by RBI, SEBI, and finance ministries for directing capital into priority sectors.
The “Updated” HML (DEA, September 2025) is likely to have expanded or refined the list of sub-sectors from its earlier versions. Sub-sectors that have been added to or newly classified in the HML — such as those in social infrastructure, urban infrastructure, logistics, data centres, or green energy — would now potentially be eligible for the Schedule V, Sl. No. 7 exemption by virtue of this notification.
Important: Notification No. 70/2026 does not reproduce the HML sub-sectors itself. Entities and practitioners will need to cross-reference the DEA notification (F.No. 13/1/2025-IPP, dated 19th September, 2025) to ascertain whether a particular business falls within a listed sub-sector.
Key Takeaways
Entities that benefit: Businesses operating in HML sub-sectors that are not already covered under the Section 138 “infrastructure facility” definition. If your entity falls in an HML sub-sector and has been uncertain about Schedule V eligibility, this notification resolves that uncertainty prospectively.
Entities already under Section 138: No change. They remain eligible under Note 5(d)(i) independently. This notification operates only for the residual category under Note 5(d)(ii).
Effective date: The notification is effective from 1st June, 2026 — the date of its publication in the Official Gazette. There is no retrospective application.
Conditions still apply: The Schedule V, Sl. No. 7 exemption is not unconditional. Entities must satisfy all other conditions specified in Schedule V. Section 11(2) makes clear that if conditions are not met in a tax year, the income becomes chargeable in that year.
Notification Details at a Glance
| Particulars | Details |
|---|---|
| Notification No. | 70 of 2026 |
| S.O. No. | S.O. 2768(E) |
| F. No. | 500/Misc./S10(23FE)/FT&TR-II |
| Issuing Authority | Central Board of Direct Taxes |
| Download Notification | Download ⬇️ |
| Dated | 1st June, 2026 |
| Effective Date | 1st June, 2026 (date of Gazette publication) |
| Signed by | Syama Saji, Under Secretary |
| Statutory basis | Section 11(5) r/w Note 5(d)(ii) of Schedule V [Table: Sl. No. 7], IT Act, 2025 |
| Refers to | DEA Notification F.No. 13/1/2025-IPP dated 19th September, 2025 (Updated HML) |
For a complete list of CBDT Notifications under the Income Tax Act, 2025, visit TaxRoutine’s Notifications and Circulars page.