CBDT Grants Income Tax Exemptions to Legal and Aviation Bodies
Last Updated: 21 November 2024
The Central Board of Direct Taxes (CBDT) has announced income tax exemptions under Section 10(46) of the Income-tax Act, 1961. These exemptions, granted to legal and aviation entities, aim to support their public service missions.
Exemptions for Legal Service Authorities
Notification No. 119/2024: Supporting DLSAs in Haryana
The CBDT has exempted specific types of income for District Legal Service Authorities (DLSAs) in Haryana. These authorities, established under the Legal Services Authorities Act, 1987, provide free legal aid and promote justice.
Exempted Income Includes:
- Grants from:
- Punjab and Haryana High Court
- National Legal Services Authority (NALSA)
- Haryana State Legal Services Authority
- Donations or grants from the Central or Haryana State Government
- Court-ordered payments, recruitment fees, and interest on bank deposits
Conditions for Exemption:
- DLSAs must refrain from commercial activities.
- The nature of income and activities must remain unchanged during the exemption period.
- DLSAs are required to file tax returns under Section 139(4C)(g) of the Income-tax Act.
Exemption Period:
Applicable for assessment years 2024-25 to 2028-29 (financial years 2023-24 to 2027-28).
Exemptions for Aviation Security
Notification No. 120/2024: Relief for NASFT
The National Aviation Security Fee Trust (NASFT), tasked with managing aviation security funding, has also been granted tax relief.
Exempted Income Includes:
- Grants and subsidies approved by the Ministry of Civil Aviation
- Aviation security fees collected under government mandates
- Funds transferred from escrow accounts of airport operators
- Interest earned on bank deposits
Conditions for Exemption:
- NASFT must avoid engaging in commercial activities.
- Activities and income structure must remain consistent.
- NASFT must file tax returns under Section 139(4C)(g) of the Income-tax Act.
Exemption Period:
Applicable for assessment years 2025-26 to 2029-30 (financial years 2024-25 to 2028-29).
Importance of the Notifications
These notifications reflect the government’s commitment to easing financial pressures on essential public services.
Benefits for Legal Sector:
- Enhanced support for free legal aid initiatives.
- Financial stability for DLSAs to continue their mission.
Benefits for Aviation Sector:
- Better funding for aviation security measures.
- Streamlined operations for NASFT.
Next Steps
The CBDT’s measures are expected to encourage efficient functioning and compliance among the exempted entities. For more details, consult the official notifications issued by the CBDT.
