Haryana State Legal Services Authority

## Report on Notification S.O. 4841(E) Regarding Income Tax Exemption for Haryana State Legal Services Authority, Panchkula **1. Executive Summary:** This report analyzes Notification S.O. 4841(E), issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes on November 23, 2021. This notification grants income tax exemption under clause 46 of section 10 of the Income-tax Act, 1961 to the Haryana State Legal Services Authority (HSLSA), Panchkula, for specific types of income. The key findings are that this exemption covers grants from NALSA and the State Government, court-ordered amounts, recruitment application fees, and interest income. The notification also outlines conditions for maintaining this exemption, including restrictions on commercial activities and the requirement to file income tax returns. It applies retrospectively to the financial year 2020-2021 and extends to the financial year 2024-2025. **2. Introduction:** The purpose of this report is to provide a comprehensive overview of Notification S.O. 4841(E), based solely on the text provided. This analysis aims to inform affected parties about the specific income tax exemptions granted to the Haryana State Legal Services Authority (HSLSA), the conditions attached to these exemptions, and the relevant time frame. **3. Policy Overview:** This is a *new* policy implemented through a notification. * **Core Objective(s):** The core objective, as inferred from the text, is to grant income tax exemption to the Haryana State Legal Services Authority, Panchkula, for specified income sources, thereby likely supporting its operations and activities. This is achieved through notifying HSLSA under clause 46 of section 10 of the Income-tax Act, 1961. **4. Background and Rationale:** As a new policy, the notification likely addresses the issue of the taxability of HSLSA's income. By granting a specific exemption, the government is likely aiming to support the HSLSA's activities related to providing legal services and fulfilling its mandate under the Legal Services Authorities Act, 1987. This suggests a policy intent to financially support and incentivize the provision of legal services through this specific authority. **5. Key Provisions:** The notification establishes the following key provisions: * **Income Tax Exemption:** Haryana State Legal Services Authority, Panchkula, is granted exemption from income tax under clause 46 of section 10 of the Income-tax Act, 1961, for the following specified income: * Grants received from National Legal Services Authority (NALSA). * Grants or donations received from the State Government of Haryana. * Amounts received under the orders of Courts. * Fees received as recruitment application fees. * Interest income earned on deposits. * **Conditions for Exemption:** The exemption is contingent upon the following conditions: * The HSLSA shall not engage in any commercial activity. * The activities and the nature of the specified income shall remain unchanged throughout the financial years. * The HSLSA shall file return of income in accordance with clause (g) of subsection (4C) of section 139 of the Income-tax Act, 1961. * **Effective Period:** The notification applies retrospectively to the financial year 2020-2021 and shall apply with respect to the financial years 2021-2022, 2022-2023, 2023-2024 and 2024-2025. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders are: * **Haryana State Legal Services Authority (HSLSA), Panchkula:** The direct beneficiary of the income tax exemption. * **Central Board of Direct Taxes (CBDT):** The implementing authority responsible for administering the Income-tax Act, 1961. * **National Legal Services Authority (NALSA):** As a grantor to HSLSA. * **State Government of Haryana:** As a grantor to HSLSA. * **Courts:** as entities that provide amount to HSLSA. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Central Board of Direct Taxes (CBDT) is responsible for implementing and overseeing the application of this notification. The Haryana State Legal Services Authority is responsible for complying with the conditions outlined in the notification to maintain its exemption status. * **Timelines and Procedures:** The notification is effective retrospectively from the financial year 2020-2021 and applies until the end of the financial year 2024-2025. The HSLSA is required to file its return of income in accordance with clause (g) of subsection (4C) of section 139 of the Income-tax Act, 1961, annually. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes and impact of this notification are: * **Financial Relief for HSLSA:** The income tax exemption will likely provide financial relief to the HSLSA, allowing it to utilize more of its resources for its core activities. * **Enhanced Legal Services:** By reducing the tax burden, the HSLSA may be able to enhance its provision of legal services within the state of Haryana. * **Compliance and Reporting:** The conditions attached to the exemption, particularly the requirement to file income tax returns, aim to ensure transparency and accountability in the HSLSA's financial operations. * **Attraction for donations:** This may attract further donations, enabling it to expand its activities **9. Conclusion:** Notification S.O. 4841(E) provides a significant income tax exemption to the Haryana State Legal Services Authority, Panchkula. This exemption, subject to specific conditions, aims to financially support the authority's operations and promote the provision of legal services. The notification's retrospective application and multi-year duration underscore the government's commitment to supporting this organization. This notification is significant as it provides clarity and financial support to the Haryana State Legal Services Authority, likely contributing to its effectiveness in providing legal services.

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