According to Tax Law, the Doctrine of Immunity of Instrumentalities means, the State and Central (Federal) Governments have immunity from paying taxes imposed by the other. The immunity is applicable to the instrumentalities set up by the Governments i.e. Statutory Corporations setup by them.

The concept of Doctrine of Immunity of Instrumentalities originated in the USA as a judicial interpretation but was not mentioned in the American constitution.

1. Article 285 of the Constitution of India exempts the properties of the Union from State taxation.
2. Article 286 deals with Restrictions as to imposition of tax on the sale or purchase of goods.
3. Article 287 deals with Exemption from taxes on electricity
4. Article 288 deals with Exemption from taxation by States in respect of water or electricity in certain cases
5. Article 289(1) of the Constitution of India exempts the properties of the State from Union taxation.
6. Article 289(2) of the Constitution of India relaxes the Doctrine saying that the Union can tax a State by passing a bill in the Parliament.
7. Central Government can impose tax on income or property of State-owned companies or Corporations. Hence Article 289(1) is applicable only on State and not on its instrumentatlities.