The Central Board of Direct Taxes (CBDT) has issued two key notifications under Section 10(46) of the Income-tax Act, 1961, exempting specified income of entities in the legal and aviation sectors from taxation.
Notification No. 119/2024
This notification grants income tax exemption to the District Legal Service Authorities (DLSAs) in Haryana. Formed under the Legal Services Authorities Act, 1987, these entities will not be taxed on the following types of income:
- Grants received from the Punjab and Haryana High Court, National Legal Services Authority (NALSA), and the Haryana State Legal Services Authority.
- Grants or donations from the Central or Haryana State Government.
- Court-ordered payments, recruitment application fees, and interest earned on bank deposits.
Conditions for Exemption:
- The DLSAs must refrain from engaging in commercial activities.
- The nature of specified income and activities must remain unchanged during the financial years.
- They are required to file income tax returns as per Section 139(4C)(g) of the Income-tax Act.
The exemption applies for assessment years 2024-25 to 2028-29, covering financial years 2023-24 to 2027-28.
Notification No. 120/2024
The second notification exempts the income of the National Aviation Security Fee Trust (NASFT), a government-established trust, from taxation. The exempted income includes:
- Grants, subsidies, or receipts approved by the Ministry of Civil Aviation.
- Aviation security fees collected as per government directives.
- Funds transferred from escrow accounts for passenger service fees maintained by airport operators.
- Interest earned on bank deposits.
Conditions for Exemption:
- The trust must not engage in commercial activities.
- The activities and income structure must remain consistent throughout the financial years.
- NASFT must file returns under Section 139(4C)(g).
The exemption applies for assessment years 2025-26 to 2029-30, covering financial years 2024-25 to 2028-29.
Official copy of the notification has been attached
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