Disclosed herein is stable topical herbal composition, useful for the treatment of specific skin conditions, such as, including, but not limited to, psoriasis, eczema, dermatitis, inflammation, pigmentation, extreme dry skin and other skin conditions requiring therapeutic intervention, wherein the said topical herbal composition comprises, oil extract of Wrightia tinctoria in combination with hydrophobic excipients and other functional excipients, such as emulsifying agent, preservatives, humectant and anti oxidant.