CBDT Notifies Section 10(46) Exemption for Legal Services Authority in Haryana

The Central Board of Direct Taxes (CBDT) under the Ministry of Finance and Department of Revenue has recently shared a notification (No. 27/2026) regarding income tax exemption.

The Central Government, using its powers given by clause (46) of section 10 of the Income-tax Act, 1961 (43), notifies the CJM-cum-District Legal Services Authority, Fatehabad, for tax exemption. It is formed under the Legal Services Authorities Act, 1987, for the said clause.

The following incomes are exempt from tax:

1. Grants received from the Punjab and Haryana High Courts or the Haryana State Legal Services Authority.
2. Grants or donations received from the Central Government or the Government of Haryana.
3. Money received under court orders
4. Recruitment application fees received
5. Interest earned on bank deposits

However, this benefit will only be made available if the assessee fulfils the following conditions:

• The Authority will not be involved in any commercial activities.
• Its activities and types of income must remain the same during the financial years.
• It must file its income tax return as required under Section 139(4C)(g) of the Income-tax Act.
• If these conditions are not followed, the government can take penalty action and cancel the tax exemption under Section 10(46).

Time Period of Exemption:

This notification will be treated as applicable from Assessment Year 2023-24 to 2025-26, relevant for FY 2022-23 to 2024-25, and also for Assessment Year 2026-27 to 2027-28, relevant for FY 2025-26 to 2026-27.