CBDT Notifies Tax Exemption to State Legal Service Authority Union Territory, Chandigarh

The Ministry of Finance, Department of Revenue, issued a notification (Notification No. 15 /2026, dated 28th January 2026), notifying the income tax exemption granted to the State Legal Service Authority Union Territory, Chandigarh, an authority established by the Administrator, Union Territory, Chandigarh, under the Legal Services Authorities Act, 1987.

As per the notification, the Central Government, using its power under clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), has granted income tax exemption to the State Legal Service Authority Union Territory, Chandigarh.

Specified Income for Tax Exemption

The tax exemption is granted for the following income:

• Grants received from the Punjab and Haryana High Court Central Authority, i.e., the National Legal Services Authority, set up under the Legal Services Authorities Act, 1987
• Grants or donations received from the Central Government or the Punjab or Haryana government for purposes related to the Legal Services Authorities Act, 1987.
• Amount received under the Court’s order
• Recruitment Application Fee
• Interest earned on bank deposits.

Applicability of Tax Exemption

The tax exemption is applicable for assessment years 2024-25 to 2025-26, relevant for the financial years 2023-24 to 2024-25, and assessment years 2026-27 to 2028-29, relevant for the financial years 2025-26 to 2027-28.

Conditions for the Exemption

This income tax exemption under Section 10(46) will be provided to the State Legal Service Authority Union Territory, Chandigarh, under the following conditions:

• The Authority must not engage in any commercial activities.
• The authority’s activities and the nature of the specified income should be the same for the whole financial year.
• The Authority is required to file its income tax returns as per Section 139(4C)(g) of the Income-tax Act, 1961.

The notification also specified that if the authority does not comply with these conditions, the same will lead to penal actions under the Income Tax Act, 1961. Also, the exemption granted under Section 10(46) may also be withdrawn if the conditions are not met.