The Delhi High Court will hear on July 16 a petition questioning whether allowances paid to Supreme Court and High Court judges can be taxed under the new income-tax regime.
A Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta on Tuesday adjourned the matter after Delhi High Court Bar Association (DHCBA) President N Hariharan requested Senior Advocate Sachit Jolly, appearing for the petitioner, not to press the case during the lawyers’ strike.
The petition, filed by the Delhi Tax Bar Association (DTBA), challenges a September 12, 2025, office memorandum issued by the Central Board of Direct Taxes (CBDT).
The memorandum states that the tax benefit relating to certain judicial allowances is available only under the old tax regime.
The dispute centres on Section 22D of the High Court Judges Act, 1954, and Section 23D of the Supreme Court Judges Act, 1958.
These provisions state that rent-free accommodation, conveyance facilities, sumptuary allowance and leave travel concession provided to judges are excluded while computing salary income.
According to the petition, the issue surfaced after a High Court judge informed the CBDT that income-tax return utilities and TDS forms under the new regime did not provide a mechanism to claim these statutory exclusions.
The CBDT maintained that allowing the exclusions under the new regime, which already offers lower tax rates, would amount to granting judges a double benefit.
The DTBA contended that the CBDT had wrongly treated the statutory exclusion as a tax exemption. It argued that the allowances covered under Sections 22D and 23D never form part of taxable salary and therefore cannot be denied under the new regime.
The association also claimed the memorandum violates Articles 125 and 221 of the Constitution, which protect judges’ allowances from being altered to their disadvantage after appointment.
The petition seeks to quash the CBDT memorandum and direct changes to tax forms to enable judges to report the exclusions. It also seeks interim relief, including an extension of the July 31 deadline for filing income-tax returns for assessment year 2026-27.
During the hearing, Jolly suggested that judges be allowed to disclose the amounts as “receipts not in the nature of income” until the case is decided.
However, after Hariharan appealed to him to honour the Bar’s strike, Jolly agreed to defer arguments. The court passed no interim order.
