CBDT Grants Income Tax Exemption to Chandigarh High Court Legal Services Committee on Costs, Grants & Bank Interest [Read Notification]

The Central Board of Direct Taxes (CBDT) has notified income tax exemption for the High Court Legal Services Committee, Chandigarh on specified income under Section 10(46) of the Income-tax Act, 1961.

The exemption, announced through Notification No. 149/2025 [F. No. 300196/37/2025-ITA-I] dated September 22, 2025 shall be applicable retrospectively for the Assessment Years 2023–24 to 2025–26, relevant to Financial Years 2022–23 to 2024–25, and prospectively for Assessment Years 2026–27 and 2027–28, which correspond to the Financial Years 2025–26 and 2026–27.

The High Court Legal Services Committee, Chandigarh is an authority constituted under the Legal Services Authorities Act, 1987 in consultation with the Chief Justice of the Punjab and Haryana High Court.

The Legal Services Committee undertakes the duty of providing free and competent legal services to weaker sections of society and persons that are not able to afford or arrange requisite necessary legal services for their needs. Following the motto that justice is a worldly right available to all, the authority is enabled by the constitutional mandate of equal justice.

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The notification grants exemptions to the legal services committee on specified categories of income including costs imposed by the Punjab and Haryana High Court, grants received from the Central Government, State Governments, government agencies, and other authorities for purposes under the Legal Services Authorities Act, 1987, as well as interest income earned on bank deposits.

The latest exemption meted out to the committee would ideally ensure that statutory funds and judicially imposed costs that have been allocated toward free legal aid are preserved entirely for their intended use.

However, the exemption is subject to a few conditions imposed by the CBDT. The Committee must not engage in any commercial activity outside its statutory functions; the activities and nature of its specified income must remain unchanged during the financial years that have been covered by the notification. Additionally, is required to duly file its return of income as per Section 139(4C)(g) of the Income Tax Act, 1961.

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