Income Exempt from Tax
• Agricultural income ( U/S 10(1) )
– Agriculture income means any
income derived from land which is
used for agriculture purpose and
which is assessed to land Revenue
in India.
Agricultural Income (10 (1)
• Such income must satisfy the
following three conditions:
• Rent or revenue should be derived from
land.
• The land must be used for agriculture
purposes.
• The land should be situated in India.
• It is exempt from the tax but it is included
in the total income to determined the rate
of tax at which the total without
agriculture income would be liable to tax.
2. Receipt from HUF (U/S 10(2)
• Any sum received by an individual as
a member of HUF out of the estate of
income of the family is exempt from
tax and not included in the total
income of the individual.
• The logic behind this is that HUF is
already taxed on this income and
hence no tax should be levied on
distribution of the income of HUF.
3. Partner’s share in the
profit of the firm: [U/S 10(2A)]
• In case of a person who is a
partner of a firm which is
separately assessed in that
case the amount of this share in
the profits of the firm ascertain
as per the partnership deed is
exempted from tax.
4.Interest to non- resident [ U/S 10(4)
• Interest on Bonds issued by
Government
• Interest on FCNR Deposits
• Interest on NRE Deposits
• 5.Interest on specified savings
certificates received by NonResident Indian Citizens [U/S 10(4B)
6.Leave Travel Concession
[ U/S 10(5)
• The Value of leave travel concession received
or due to an individual is exempted to the
extent it is actually spent.
• Thus, the exemption is available to any
individual in respect of the value of any travel
concession or assistance received by or due
to him,
– From his employer for himself and his family, in
connection with his proceeding on leave to any
place in India.
– From his employer or former employer for him
self and his family, in connection with his
proceeding to any place in India after
retirement service or After the termination of
service.
7.
Remuneration received by foreign
Diplomat [U/S 10(6)(ii)]
• The exemption from tax is available in the
case of an individual who is not a citizen of
India in respect of the remuneration
received by him as an official by whatever
name called, of an embassy, high
commission, legation, commission,
consulate or the trade representations of a
foreign state, or as a member of the staff
of any of these officials, for service in such
capacity.
• The exemption is given only to those
officials of foreign country in which
corresponding Indian officials enjoy a
similar exemption.
Foreign Allowances and perquisites to Government
Employees outside India [U/S 10(7) ]
• Sub-section (7) of section 10
states that any allowance or
perquisites paid or allowed as
such out side India by the
Government to a citizen of India
for rendering services outside
India will be totally exempted
from tax.
LIC/PF Exemptions
• 8.Amount received in life insurance policy:[U/S
10(10D)]
• Any sum received under a life insurance policy,
including the sum allocated by way of bonus on
such policy shall be totally exempt from tax.
• 9. Payment from provident fund[ U/S 10(11)
• Any payment from a provident fund to which the
provident funds Act, 1925, applies or from any other
provident fund set up by the central Government
and notified in the official gazette (i.e. public
provident fund)is totally exempted from tax.
RPF
• 10.Accumulated balance from a recognized
provident fund[u/s 10(12)]
• The accumulated balance due and
becoming payable to an employee
participating a recognized provident fund,
to the extent provided in rule 8 of part A of
schedule, is exempted from tax.
• 11. Payment from an approved
superannuating fund [ U/S 10(13)]
Interest
• 12. Certain income by way of
interest etc. exempted from tax[U/S
10(15).
•
Certain income by way of interest,
premium etc from certain securities
certificate, bonds, deposit etc. as
specified under this section is
exempted from tax.
Scholarship/ MP
Allowance
• 13. Scholarship [ U/S 10(16)]
•
Scholarship granted to meet the
cost of education is totally exempt
from tax and will not be included in
the computation of income.
• 14.Allowances received by the
member of parliament or state
legislature[U/S 10(17)
Awards
• 15. Awards[U/S 10(17A)]
•
Awards received , whether in cash or kind, as
stated below shall be exempted from tax as per sub
section 17A of section 10
• 16. Family pension received by the family member
•
of armed forces[ U/S 10(19)]
Family pension received by the widow or
children or nominated heirs, of a member of armed
forces including parliament forces of the union ,
where the said member dies in the course of
operation duties shall be exempted from tax.
• 17. Annual value of one palace of a ruler[ U/S
10(19A)]
18. Pension received by a person , Honored
by a Gallantry Award U/S 10(18)]
•
This clause provides exemption
for any income by way of :• a) Pension received by an individual
who has been in service of central or
state Gov. and has been
awarded,”Parama Vir Chakra)””Maha
Vir Chakra” or Vir Chakra
• b) Family pension received by any
member of the family in case of
death of the awards.
•
19. Clubbed Income of a
Minor Child {U/S 10[32]}
• In case of the income of a minor
child clubbed with that of the
parent U/S 64(1A), such income
is exempted from tax upto Rs.
1500/- in respect of each minor
child whose income is clubbed.
20. Income arising from Transfer of
Units of Units, 1964 {U/S 10(33)}
• Any income arising from transfer
of capital asset being a unit of
Unit Scheme, 1964 and where
the transfer of such an asset
takes place on or after 1st April
2002, it shall be exempt from
tax
21. Income by way of Dividend
{U/S 10(34)}
• Income by way of dividend as
referred in section 115-0 is exempted
from tax in the hands of the
shareholders. Section 115-0
provides that every domestic
company declaring dividend
(including interim dividend) shall pay
the tax on dividend. In view of this,
tax being levied on a company on
distributed profits, the dividend
income in the hands of the
shareholders will now be exempt
• 22. Income from Mutual Fund
etc. {U/S 10(35)}
•
• 23 Capital Gain on compensation
received on compulsory acquisition
of Agricultural Land in certain urban
Areas {U/S 10(37)}
•
• 24. Long Term capital gains or
Transfer of Equity Shares in a
Company or Units of an Equity
oriented fund {u/S 10(38)}