What is Exempted Income? Make a list the Exempted Income under Indian Income Tax System?

Exempted incomes are those incomes which are not added to the total income for the purpose of taxation. The incomes on which tax is not levied are known as exempted incomes. These receipts do not come under the purview of taxation. They are known as fully exempted incomes. There are partially exempted incomes as well which are included in total income but are exempt to some specified rate. Incomes of certain institutions or authorities are also exempt.

LIST OF EXEMPTED INCOMES UNDER INDIAN INCOME TAX ACT.

Certain incomes are fully exempted, certain are partially exempted and certain institutions are exempted from income tax. The following is a list of the exempted incomes:

Fully exempted incomes (Section 10):

The following are tax free incomes of individuals:

  • Agricultural Income Section 10(1).
  • Sums received by a member from HUF Section 10 (2).
  • Share of profit of a partner from a firm [Section 10(2A)].
  • Any, assessee getting income in his non-resident account [Section 10(4)].
  • Travel Concession or Assistance Section 10(5).
  • Remuneration to diplomats, foreign national as employee of a foreign enterprise, NRI employed on a ship, employee of foreign government who are not citizens of India. [Section. 10(6)]
  • Allowances and perquisites for foreign service to citizens of India Section 10(7).
  • Death-cum-retirement Gratuity Section 10 (10).
  • Commuted value of pension Section 10 (10A).
  •  Encashment of earned leave Section 10 (10AA).
  • Retrenchment compensation to workers Section 10(10B).
  • Payments under Bhopal Leak Gas Disaster Section 10(10BB).
  • Compensation received under any disaster Section 10(10BC).
  • Payment received by an employee of a public sector company for voluntary retirement Section 1 0(10C).
  • Payment from Statutory and Public Provident fund Section 10(11).
  • Payment from recognized provident Fund Section 10(12).
  • Payment from approved superannuation Fund Section 10(13).
  • House Rent Allowance Section 10(13A).
  • Special Allowance or benefit Section 10 (14).
  • Interest on certain government securities and Deposits Section 10(15).
  • Scholarships Section 10 (16).
  • Daily and constituency allowance received by MPs and MLAs [Section 10(17)].
  • Awards Section 10(17A).
  • Pension/Family pension received by government employees who have been awarded with a notified gallantry award Section 10(18).
  • Family pension to family members of armed forces personnel killed in certain circumstances. [Sec 10(19)].
  • Annual value of one palace of ruler Section 10(19A).
  • Income of a member of the scheduled tribe living in NE states Section 10(26).
  • Income by way of subsidy from the tea board [Section 10(27)].
  • Subsidy received by planters of rubber, coffee and cardamom. [Section 10(31)].
  • Income of a minor clubbed in the hands of a parent [Section 10(32)].
  • Certain dividend to be exempt in the Viands of the shareholders. [Section 10(34)].
  • Incomes from units of UTI and mutual funds to be exempt in the hands of unit holders [Section 10(35)].
  • Long term capital Gain from shares acquired after March 2003 and before March 2004.[Section 10(36)].
  • Exemption of capital gains on compensation received ion compulsory acquisition of agricultural land situated within specified urban limits [Section 10(37)].
  • Exemption of long-term Capital Gain arising from sale of shares and units [Section 10(38)].
  • Exemption of specified income from international sporting event held in India. [Section 10(39).
  • Exemption of amount received by an individual as loan under reverse mortgage scheme.[Section 10(43)].
  • Exemption of Income of New Pension Scheme Trust [Section 10(44)].
  • Notified allowance or perquisite paid to Chairman/Member (retired also) of U.P.S.C. [Section 10(45)].
  • Income of an infrastructure debt fund [Section 10(47)].
  • Exemption in respect of income received by certain foreign companies[Section 10(48)]

w.e.f.1.4.2012.

Incomes accruing to certain authorities.

  • Certain incomes of a local authorities Section 10(20).
  • Income of housing boards constituted for planning, development or improvement of cities, towns or villages [Section 10(20A)].
  • Any income of an approved scientific research association [Section 10(21)].
  • Income of specified non-agencies [Section 10(22B)].
  • Income of medical institution Section 10(22A).
  • Income of Sports Association Section 10(23).
  • Income of an association established to encourage certain professions Section 10(23A).
  • Income of any Regimental Fund of the Armed Forces Section 10(23AA).
  • Income of Khadi and Village Industries Section 10(23B).
  • Income of Khadi and Village Industries Board Section 10 (23BB).
  • Income of statutory bodies for the administration of Public Charitable Trust Section 10(23BBA).
  • Income of certain Mutual Funds Section 10(23C).
  • Income of certain National Funds Section 10(23C).
  • Income of Exchange Risk Administration Fund Section 10 (23E).
  • Income of a Registered Trade Union Section 10(24).
  • Income on behalf of certain funds Section 10(25).
  • Income from statutory corporations/bodies for promoting the interests of scheduled castes/ tribes Section 10(26B).
  • Income of a marketing authority Section 10(29).

Incomes in the hands of non-citizens Section 10(6)

  • Passage Money.
  • Income received by an ambassador, etc.
  • Remuneration received by an employee of a foreign enterprise.
  • Remuneration received from foreign philanthropic institutions.
  • Income in the hands of a technician.
  • Employment bon a foreign ship.
  • Employment as a professor or other teacher.
  • Employment for research.
  • Remuneration in Training.

Income in the hands of non-residents.

  • Certain interest received by non-resident Indian Citizens Section 10(4) and (4B).
  • Remuneration received for rendering service in connection with shooting of a cinematography film in India Section 10(5A).
  • Fee for technical services received by a foreign company Section 10 (6A).
  • Tax paid on behalf of a non-resident Section (6B).
  • Income of a foreign company from technical services Section (6C).

Miscellaneous Incomes.

  • Allowances to members of Parliament and members of Legislature Section 10(17).
  • Income of a member of a Scheduled Tribe Section 10(26).
  • Tax-credit certificates Section 10(28).

Income of Newly Established Industrial Undertakings in Free Trade Zones Section 10(A).

Income from Newly Established Hundred Percent Export-Oriented Undertakings Section 10(B).

Partially Exempted Incomes Section 86.

  • Share from Unregistered Firm.
  • Share from Association of Persons.

Income of Charitable and Religious Trust and Political Party.

  • Income of Public Charitable and Religious Trusts Section 11, 12, 13.
  • Income of a political Party Section 13 A.

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