The Central Board of Direct Taxes, through Notification No. 17/2026 dated 5 February 2026, has granted income-tax exemption under section 10(46) of the Income-tax Act, 1961 to the District Legal Service Authority, Faridabad, constituted under the Legal Services Authorities Act, 1987. The exemption applies to specified incomes including grants received from the Punjab and Haryana High Court, National and State Legal Services Authorities, grants or donations from the Central or Haryana State Government, amounts received under court orders, recruitment application fees, and interest earned on bank deposits. The notification is subject to strict conditions: the Authority must not undertake any commercial activity, the nature of its activities and income must remain unchanged, and it must file returns under section 139(4C). Non-compliance may result in penal action and withdrawal of exemption. The exemption is given retrospective effect for assessment years 2023–24 to 2025–26 and will apply prospectively for assessment years 2026–27 and 2027–28, with the government clarifying that no person is adversely affected by this retrospective application.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 17/2026-Income Tax | Dated: 5th February, 2026
S.O. 571(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘District Legal Service Authority’, Faridabad (PAN AAAJC0807B), constituted by Government of Haryana for every District in the State of Haryana in exercise of powers conferred by sub-section (1) of section 9 of the Legal Services Authorities Act, 1987 (Central Act No. 39 of 1987), in respect of the following specified income arising to that body, namely:-
(a) Grants received from the Punjab and Haryana High Court, Central Authority i.e. National Legal Services Authority and State Authority i.e. Haryana State Legal Services Authority for the purposes of the Legal Services Authorities Act, 1987;
(b) Grants or donation received from the Central Government or the State Government of Haryana for the purpose of the Legal Services Authorities Act, 1987;
(c) Amount received under the order of the Court;
(d) Fee received as recruitment application fee; and
(e) Interest earned on bank deposits.
2. This notification shall be effective subject to the conditions that ‘District Legal Service Authority’, Faridabad-
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and
(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C)
of section 139 of the Income-tax Act, 1961.
2.1 Failure to comply with these conditions may result in the initiation of penal actions under the provisions
of the Income-tax Act, 1961 and withdrawal of the exemption granted u/s 10(46) of the Act.
3. This notification shall be deemed to have been applied for assessment years 2023-2024,2024-2025
and 2025-2026 and shall apply with respect to the assessment years 2026-2027, 2027-2028.
[F. No. 300196/64/2018-ITA-I(Part-1)]
HARDEV SINGH, Under Secy.
Explanatory Memorandum
It is certified that no person is being adversely affected by giving retrospective effect (with effect from the year of application made before the Board/Department) to this notification.
