TAX-FREE INCOMES / EXEMPTED INCOMES FROM TAX U/S 10.
TAX-FREE INCOMES
/ EXEMPTED INCOMES FROM TAX U/S 10.
[As amended by
Finance Act, 2018]
Agricultural Income [Section 10(1)]
As per section 10(1), agricultural income earned by the
taxpayer in India is exempt from tax. Agricultural income is defined under
section 2(1A) of the Income-tax Act. As per section 2(1A), agricultural income
generally means:
(a) Any rent or revenue derived from
land which is situated in India and is used for agricultural purposes.
(b) Any income derived from such land by
agriculture operations including processing of agricultural produce so as to
render it fit for the market or sale of such produce.
(c) Any income attributable to a farm
house subject to satisfaction of certain conditions specified in this regard in
section 2(1A).
Any income
derived from saplings or seedlings grown in a nursery shall be deemed to be
agricultural income.
Amount
received by a member of the HUF from the income of the HUF, or in case of
impartible estate out of income of family estate [Section 10(2)]
As
per section 10(2), amount received out of family income, or in case of
impartible estate, amount received out of income of family estate by any member
of such HUF is exempt from tax.
Share of profit received by a partner from the firm [Section
10(2A)]
As
per section 10(2A), share of profit received by a partner from a firm is exempt
from tax in the hands of the partner. Further, share of profit received by a
partner of LLP from the LLP will be exempt from tax in the hands of such
partner. This exemption is limited only to share of profit and does not apply
to interest on capital and remuneration received by the partner from the
firm/LLP.
Interest on notified savings certificates [Section 10(4B)]
As
per section 10(4B), in the case of an individual, being a citizen of India or a
person of Indian origin, who is a non-resident, any income by way of interest
on notified savings certificates.
(subscribed
in convertible foreign exchange) issued before the 1st day of June, 2002 by the
Central Government is exempt from tax.
Leave travel concession [Section 10(5)]
An
employee can claim exemption under section 10(5) in respect of Leave
Travel Concession. Exemption under section 10(5) is available to all
employees (i.e. Indian as well as foreign citizens).
Exemption
is available in respect of value of any travel concession or assistance
received or due to the employee from his employer (including former employer)
for himself and his family members in connection with his proceeding on leave
to any place in India. Other provisions to be kept in mind in this regard are
as follows:
Where
journey is performed by air: Amount of exemption will be lower of amount of economy
class air fare of the National Carrier by the shortest route or actual amount
spent.
Where
journey is performed by rail: Amount of exemption will be lower of amount of
air-conditioned first class rail fare by the shortest route or actual amount
spent. The same rule will apply where journey is performed by any other mode
and the place of origin of journey and destination are connected by rail.
Where the
place of origin and destination are not connected by rail and journey is
performed by any mode of transport other than by air:
The exemption will be as follows:
(a) If recognised public transport
exists: Exemption
will be lower of first class or deluxe class fare by the shortest
route or actual amount spent.
(b) If no recognised public transport
exists: Exemption
will be lower of amount of air-conditioned first class rail fare by the
shortest route (considering as if journey is performed by rail) or actual
amount spent.
Block: Exemption is available for 2
journeys in a block of 4 years. The block applicable for current
period is calendar year 2014-17. The previous block was of calendar year
2010-2013.
Carry
over: If an
employee has not availed of travel concession or assistance in respect of one
or two permitted journeys in a particular block of 4 years, then he is
entitled to carry over one journey to the next block. In this situation,
exemption will be available for 3 journeys in the next block. However, to avail
of this benefit, exemption in respect of journey should be utilised in the
first calendar year of the next block. In other words, in case of carry over,
exemption is available in respect of 3 journeys in a block, provided exemption
in respect of at least 1 journey is claimed in the first year of the next
block.
Exemption is in respect of actual expenditure on fare,
hence, if no journey is performed, then no exemption is available.
Family:
Family will include spouse and
children of the individual, whether dependent or not and parents,
brothers, sisters of the individual or any of them who are wholly or mainly
dependent on him.
Exemption
is restricted to only 2 surviving children born after October 1, 1998 (multiple
births after first single child will be considered as one child only), however,
such restriction is not applicable to children born before October 1, 1998.
Remuneration received by specified diplomats and their staff
[Section 10(6)(ii)]
As
per section 10(6)(ii), in
case of an individual who is not a citizen of India, remuneration received
by him as an official (by whatever name called) of an embassy, high Commission,
legation, Commission, consulate or trade representative of a foreign State, or
member of the staff of any of that official is exempt from tax, if
corresponding Indian official in that foreign country enjoys a similar
exemption.
Remuneration of a foreign trainee [Section 10(6)(xi)]
As
per section 10(6)(xi), the remuneration received by a foreign trainee as an
employee of foreign Government during his stay in India in connection with his
training in any establishment or office of, or in any undertaking owned by,—
i.
the
Government ; or
ii.
any
company owned by the Central Government, or any State Government
iii.
any
company which is a subsidiary of a company referred to in item (ii) ; or
iv.
any
corporation established by or under a Central, State or Provincial Act ; or
v.
any
co-operative society wholly financed by the Central Government, or any State
Government
Technical fees received by a notified foreign company
[Section 10(6C)]
Section
10(6C) grants exemption from tax in respect of income arising to notified
foreign company by way of royalty or fees for technical services received in
pursuance of an agreement entered into with that Government for providing
services in or outside India in projects connected with security of India.
Royalty/Fees
received by non-resident from National Technical Research Organisation [Section
10(6D)]
As
per section 10(6D), income arising to non-resident by way of royalty or fees
for technical services from services rendered to National Technical Research
Organization (‘NTRO’) will be exempt from tax in India.
Allowance/perquisites to Government employee outside India
[Section 10(7)]
As
per section 10(7), any allowances or perquisites paid or allowed as such
outside India by the Government to a citizen of India for rendering service
outside India is exempt from tax.
Death-cum-retirement gratuity received by Government
servants [Section 10(10)(i)]
Section
10(10)(i) grants exemption to gratuity received by Government employee (i.e.,
Central Government or State Government or local authority).
Gratuity received by a non-Government employee covered by
Payment of Gratuity Act, 1972 [Section 10(10)(ii)]
As per section 10(10)(ii), exemption
in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972 will be lower of following :
15 days’ salary × years of service.
Maximum amount specified, i.e., Rs. 20,00,000*.
Gratuity actually received.
* Limit increased from Rs. 10 lakhs to
Rs. 20 lakhs vide Notification No. 1420(E), dated 29-3-2018.
Note:
1)
Instead
of 15 days’ salary, only 7 days salary will be taken into consideration in case
of employees of seasonal establishment.
2)
15
days’ salary = Salary last drawn × 15/26
3)
Salary
for this purpose will include basic salary and dearness allowance only. Items
other than basic salary and dearness allowance are not to be considered.
4)
In
case of piece rated employee, 15 days’ salary will be computed on the basis of
average of total wages (excluding overtime wages) received for a period of
three months immediately preceding the termination of his service.
5) Part of the year, in excess of 6
months, shall be taken as one full year.
Gratuity received by a non-Government employee not covered
by Payment of Gratuity Act, 1972 [Section 10(10)(iii)]
As per section 10(10)(iii), exemption in respect of gratuity
in case of employees not covered by the Payment of Gratuity Act, 1972 will be
lower of following :
Half month’s salary for each completed year of service, i.e.,
[Average monthly salary × ½] × Completed years of service. .
Rs. 10,00,000.
Gratuity actually received.
Note:
1)
Average
monthly salary is to be computed on the basis of average of salary for 10
months immediately preceding the month of retirement.
2)
Salary
for this purpose will include basic salary, dearness allowance, if the terms of
service so provide and commission based on fixed percentage of turnover
achieved by the employee.
3) While computing years of service,
any fraction of a year is to be ignored.
Pension [Section 10(10A)]:
As per
section 10(10A), any commuted pension, i.e., accumulated pension in lieu of
monthly pension received by a Government employee is fully exempt from tax.
Exemption is available only in respect of commuted pension and not in respect
of un-commuted, i.e., monthly pension. Exemption in respect of commuted pension
in case of a non-Government employee will be as follows:
If the employee receives gratuity,
one third of full value of commuted pension will be exempt from tax under
section 10(10A).
If the employee does not receive
gratuity, one half of full value of commuted pension will be exempt from tax
under section 10(10A).
Leave salary [Section 10(10AA)]
As
per section 10(10AA), leave encashment by a Government employee at the time of
retirement (whether on superannuation or otherwise) is exempt from tax. In the
hands of non-Government employee exemption will be least of the following:
1.
Period
of earned leave standing to the credit in the employee’s account at the time of
retirement (*) × Average monthly salary ($).
2.
Average
monthly salary ($) × 10 (i.e., 10 months’ average salary).
3.
Maximum
amount as specified by the Government, i.e., Rs. 3,00,000.
4.
Leave
encashment actually received at the time of retirement.
(*)Leave
credit to the account of the employee at the time of retirement should be
restricted to 30 days per year of service if leave entitlement as per service
rules exceeds 30 days per year of actual service.
($) Salary
for the above purpose means average salary drawn in the past ten months
immediately preceding the retirement (i.e., preceding the day of
retirement) and will include basic salary, dearness allowance (if considered
for computing all the retirement benefits) and commission based on fixed
percentage of turnover achieved by the employee.
Apart from
the above items, salary for this purpose does not include any other allowances
or perquisites.
Retrenchment compensation [Section 10(10B)]
As
per section 10(10B), compensation received at the time of retrenchment is
exempt from tax to the extent of lower of the following:
(a)
An
amount calculated in accordance with the provisions of section 25F(b) of
the Industrial Dispute Act, 1947; or
(b)
Maximum
amount specified by the Central Government (Rs. 5,00,000);
(c) Actual amount received.
Under
the Industrial Dispute Act, a workman is entitled to retrenchment compensation,
equal to 15 days’ average pay for each completed year of continuous service or
any part in excess of six months.
Compensation
in excess of aforesaid limits is taxable as salary. However, the aforesaid
limit is not applicable in cases where compensation is paid under any scheme
approved by the Central Government.
Compensation for Bhopal Gas Leak Disaster [Section 10(10BB)]
Compensation
[in accordance with Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985]
received by victims of Bhopal gas leak disaster is exempt from tax. However,
compensation received for any expenditure which is allowed as deduction from
taxable income is not exempt.
Compensation on account of any disaster [Section 10(10BC)]
Any
amount received from the Central Government or State Government or a Local
Authority by an individual or his legal heirs as compensation on account of any
disaster is exempt from tax. However, no deduction is available in respect of
the amount received or receivable to the extent such individual or his legal
heirs has been allowed a deduction under the Act on account of loss or damage
caused due to such disaster. Disaster here means any disaster due to any
natural or man-made causes or by accident/negligence which results in
substantial loss of human life or damage to property or environment and the magnitude
of such disaster is beyond coping capacity of community of the affected area.
Payment at the time of voluntary retirement [Section
10(10C)]
As
per section 10(10C), any compensation received at the time of voluntary
retirement or termination of service is exempt from tax, if the following
conditions are satisfied:
Compensation is received at the time
of voluntary retirement or termination (or in the case of an employee of public
sector Company, at the time of voluntary separation).
Compensation is received by an
employee of following undertakings-
a)
public
sector company ; or
b)
any
other company ; or
c)
an
authority established under a Central, State or Provincial Act ; or
d)
a
local authority ; or
e)
a
co-operative society ; or
f) a University established or
incorporated by or under a Central, State or Provincial Act and an institution
declared to be a University under section 3 of the University Grants Commission
Act, 1956 (3 of 1956) ; or
g)
an
Indian Institute of Technology within the meaning of clause (g) of
section 3 of the Institutes of Technology Act, 1961 (59 of 1961) ; or
h)
any
State Government; or
i)
the
Central Government; or
j)
Notified
institutes having importance throughout India or in any State or States,
k)
Notified
institute of management
Compensation is received in
accordance with the scheme of voluntary retirement/separation, which is framed
in accordance with guidelines prescribed under Rule 2BA of Income-tax Rules,
1962*.
Maximum amount of exemption
is Rs. 5,00,000.
Where exemption is allowed to an
employee under section 10(10C) for any assessment year, no exemption
under this section shall be allowed to him for any other assessment
year.
With effect from assessment year
2010-11, section 10(10C) has been amended to provide that where any
relief has been allowed to an assessee under section 89 for any assessment year
in respect of any amount received or receivable on his voluntary retirement or
termination of service or voluntary separation, no exemption under section 10(10C)
shall be allowed to him in relation to such or any other assessment year.
*Guidelines prescribed under Rule 2BA of Income-tax
Rules. 1962
Voluntary retirement scheme should
be framed in accordance with the following guidelines:
i.
it
should apply to an employee who has completed 10 years of service or completed
40 years of age. This requirement would not be in case of amount received by an
employee of a public sector company under the scheme of voluntary separation
framed by such public sector company.
ii.
it
should apply to all employees (by whatever name called) including workers and
executives of a company or of an authority or of a co-operative society, as the
case may be, excepting directors of a company or of a co-operative society;]
iii. the scheme of voluntary retirement
or voluntary separation should be drawn to result in overall reduction in the
existing strength of the employees;
iv. the vacancy caused by the voluntary
retirement or voluntary separation is not to be filled up;
v. the retiring employee of a company
shall not be employed in another company or concern belonging to the same
management
vi. the amount receivable on account of
voluntary retirement or voluntary separation of the employee does not exceed
the amount equivalent to
-
3
months salary* for each completed year of service or
-
salary
at the time of retirement multiplied by the balance months of service left
before the date of his retirement
*Salary for this purpose will
include basic salary, dearness allowance, if the terms of service so provide
and commission based on fixed percentage of turnover achieved by the employee.
Payment from account opened in accordance with the Sukanya
Samriddhi Account Rules, 2014 [Section 10(11A)]
As per section 10(11A), any payment from an account opened
in accordance with the Sukanya Samriddhi Account Rules, 2014 made under the
Government Savings Bank Act, 1873 is exempt from tax. In other words, interest
and withdrawals from such account will be exempt from tax under section
10(11A).
Payment from the National Pension System Trust to an
employee [Section 10(12A)]
Any
payment from the National Pension System Trust to an assessee on closure of
account or his opting out of the pension scheme referred to in section 80CCD,
to the extent it does not exceed 40 % of the total amount payable to him at the
time of closureor his opting out of the scheme, is exempt from tax.
Partial withdrawal from NPS [Section 10(12B)]
To provide relief to an employee
withdrawing partial amount from National Pension System (NPS) Trust. A new
clause (12B) is inserted under section 10 with effect from assessment year
2018-19 to provide that the withdrawal from NPS will not be chargeable to tax
if the following conditions are satisfied:-
1. Amount of withdrawal should not
exceed 25% of total contribution made by an employee in NPS.
2.
Partial
withdrawal should be made in accordance with the terms and conditions specified
under the Pension Fund Regulatory and Development Authority Act, 2013 and the
regulations made thereunder.
House rent allowance [Section 10(13A)]
As per section 10(13A), read
with rule 2A, the exemption in respect of HRA will be lower of the following
amounts:
(1)
50%
of salary, when residential house is situated at Mumbai, Kolkata, Delhi or
Chennai and 40% of salary where residential house is situated at any other
place.
(2)
HRA
actually received by the employee in respect of the period during which rental
accommodation is occupied by the employee during the previous year.
(3) Rent paid in excess of 10% of
salary.
Salary
will include basic salary, dearness allowance forming part of salary while
computing all retirement benefits and commission based on fixed percentage of
turnover achieved by the employee. Apart from this, salary for this purpose
does not include any other allowances/perquisites.
Salary
for this purpose shall be computed on due basis in respect of period during
which the accommodation is occupied by the employee in the previous year.
Hence, any payments not pertaining to the previous year or not pertaining to
the period of occupation of the accommodation shall be excluded.
Prescribed allowances or benefits
[Section 10(14)]
As
per section 10(14), read with rule 2BB following allowances granted to an
employee are exempt from tax subject to certain limit:
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Allowances
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Exemption Limit
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Children Education Allowance
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Up to Rs. 100 per month per child
up to a
maximum of 2 children is exempt
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Hostel Expenditure Allowance
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Up to Rs. 300 per month per child
up to a
maximum of 2 children is exempt
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Transport Allowance granted to an
employee to
(who is a blind and handicap) meet
expenditure on
commuting between place of
residence and place of
duty
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Rs. 3,200 per month for blind and
handicapped employees is exempt
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Allowance granted to an employee
working in any
transport business to meet his
personal expenditure
during his duty performed in the
course of running
of such transport from one place
to another place
provided employee is not in
receipt of daily
allowance.
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Amount of exemption shall be lower
of
following:
a)
70% of such allowance; or
b)
Rs. 10,000 per month.
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Conveyance Allowance granted to
meet the
expenditure on conveyance in
performance of
duties of an office
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Exempt to the extent of
expenditure
incurred for official purposes
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Travelling Allowance to meet the
cost of travel on
tour or on transfer
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Exempt to the extent of
expenditure
incurred for official purposes
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Daily Allowance to meet the
ordinary daily charges
incurred by an employee on account
of absence
from his normal place of duty
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Exempt to the extent of
expenditure
incurred for official purposes
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Helper/Assistant Allowance
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Exempt to the extent of
expenditure
incurred for official purposes
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Educational scholarship [Section
10(16)]
Any
amount received as educational scholarship (i.e., scholarship to meet
the cost of education is exempt from tax in the hands of recipient).
Daily allowance to a Member of
Parliament [Section 10(17)]
Following
allowances are exempt from tax in the hands of a Member of Parliament and a
Member of State Legislature—
•
Daily
allowance received by a Member of Parliament or by a Member of State
Legislature or by member of any committee thereof.
•
Any
other allowance received by a Member of Parliament under the Members of
Parliament (Constituency Allowance) Rules, 1986.
•
Any
Constituency allowance received by a Member of State Legislature.
Awards [Section 10(17A)]
Any payment received in pursuance of following (whether paid
in cash or in kind) is exempt from tax:
Any award instituted in the public
interest by the Central Government or State Government or by any other body
approved by the Central Government in this behalf.
Any reward by the Central Government
or any State Government for such purpose as may be approved by the Central
Government in this behalf in the public interest.
Family pension received by the
family members of armed forces [Section 10(19)]
From
the assessment year 2005-06, family pension received by the widow or children
or nominated heirs, of a member of armed forces (including paramilitary forces)
of the Union, is exempt from tax in the hands of such family members, if the
death of such member of armed forces has occurred in the course of operational
duty in prescribed circumstances and subject to such conditions as may be
prescribed (see rule 2BBA for prescribed circumstances and conditions).
Annual value of one palace [Section 10(19A)]
Annual
value of any one palace in the occupation of a former ruler is exempt from tax
under section 10(19A).
Income of local authority [Section 10(20)]
The following income of a local authority
is exempt from tax:
a) Income which is chargeable under the
head “Income from house property”, “Capital gains” or “Income from other
sources” or
b) Income from a trade or business
carried on by it which accrues or arises from the supply of a commodity or
service (not being water or electricity) within its own jurisdictional area or
c) Income from business of supply of
water or electricity within or outside its own jurisdictional area.
Income of a news agency [Section 10(22B)]
Any
income of a notified news agency, set-up in India solely for collection and
distribution of news is exempt from tax provided that the news agency applies
its income or accumulates it for application solely for collection and
distribution of news and does not distribute its income in any manner to its
members.
Income of a professional association [Section 10(23A)]
Any
income (other than income from house property and income from rendering any
specific service or income by way of interest or dividend on investment) of an
professional institution/association is exempt from tax, if the following
conditions are satisfied:
1)
Professional
institution is established in India for the purpose of control, supervision,
regulation or encouragement of the profession of law, medicine, accountancy,
engineering or architecture or such other notified profession.
2) The institution applies its income,
or accumulates it for application, solely to the objects for which it is
established.
3) The institution is approved by the
Central Government by general or special order.
Income received on behalf of Regimental Fund [Section
10(23AA)]
Any
income received by any person on behalf of any Regimental Fund or Non-Public
Fund established by the armed forces of the Union for the welfare of the past
and present members of such forces or their dependents, is exempt from tax.
Income of a fund established for welfare of employees
[Section 10(23AAA)]
Any
income received by any person on behalf of a fund established, for such purpose
as may be notified by the Board in Official Gazette, for the welfare of
employees or their dependents and of which fund such employees are members, is
exempt from tax, if such fund applies or accumulates its income for exclusive
application towards its objects, invests its funds in the modes specified in
section 11(5) and such fund is approved by the Principal Commissioner or
Commissioner in accordance with rule made in this behalf (see rule 16C
and Form No. 9).
Income of pension fund [Section 10(23AAB)]
Any
income of a fund set-up by the Life Insurance Corporation of India on or after
August 1, 1996 or any other insurer to which contribution is made by any person
for receiving pension from such fund, and which is approved by the Controller
of Insurance or the Insurance Regulatory and Development Authority, is exempt
from tax.
Incomes
of statutory bodies for the administration of public charitable trust [Section
10(23BBA)]
Any
incomes of bodies or authority established or constituted or appointed under
any Central, State or Provincial Act for the administration of public,
religious or charitable trust or endowments (including any place of religious
worship) or societies for religious or charitable purpose, is exempt from tax.
However, this exemption shall not apply to income of any such trust, endowment,
or society.
Income of European Economic Community [Section 10(23BBB)]
Any
income of European Economic Community derived in India by way of interest,
dividends or capital gains, from investments made out of its funds under a
notified scheme is exempt from tax.
Income of SAARC fund [Section 10(23BBC)]
Any income of SAARC fund for
Regional Projects is exempt from tax under section 10(23BBC).
Income
of Secretariat of Asian Organisation of Supreme Audit Institutions [Section
10(23BBD)]
Any income of Secretariat of Asian Organisation of Supreme
Audit Institutions is exempt from tax for the assessment years 2001-02 to
2010-11.
Income of Insurance Regulatory and Development Authority
[Section 10(23BBE)]
Any
income of the Insurance Regulatory and Development Authority established under
section 3(1) of the Insurance Regulatory and Development Authority Act, 1999 is
exempt from tax.
Income of North-Eastern Development Financial Corporation
Limited [Section 10(23BBF)]
No exemption is available under
section 10(23BBF) from assessment year 2010-11.
Income of Central Electricity Regulatory Commission [Section
10(23BBG)]
Income
of Central Electricity Regulatory Commission is exempt from tax from the
assessment year 2008-09.
Income of the Prasar Bharati [Section 10(23BBH)]
Any
income of the Prasar Bharati (Broadcasting Corporation of India) established
under section 3(1) of the Prasar Bharati (Broadcasting Corporation of India)
Act, 1990 is exempt from tax.
Income of certain national funds[Section
10(23C)(i)/(ii)/(iii)]
Any
income received by any person on behalf of the Prime Minister’s National Relief
Fund, the Prime Minister’s Fund (Promotion of Folk Art) or the Prime Minister’s
Aid to Students Fund is exempt from tax under clause (i), (ii) and (iii) of
section 10(23C) respectively.
Income of National Foundation for Communal Harmony [Section
10(23C)(iiia)]
Any
income of National Foundation for Communal Harmony is exempt from tax under
section 10(23C)(iiia).
Income of Swachh Bharat Kosh [Section 10(23C)(iiiaa)]
Income
of the Swachh Bharat Kosh, set up by the Central Government is exempt under
section 10(23C)(iiiaa).
Income of Clear Ganga Fund [Section 10(23C)(iiiaaa)]
Income
of the Clear Ganga Fund, set up by the Central Government is exempt under
section 10(23C)(iiiaaa).
Income
of Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund [Section
10(23C)(iiiaaaa)]
As
per section 10(23C)(iiiaaaa) (as inserted by the Finance Act, 2017 with
retrospective effect from the assessment year 1998-99), income of the Chief
Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund in respect of
any state or union territory is exempt from tax.
Income of Educational Institutions [Section
10(23C)(iiiab)/(iiiad)/(vi)] Section 10(23C)(iiiab)
Income
of any university or other educational institution existing solely for
educational purposes and not for purposes of profit, and which is wholly or
substantially financed by the Government would be exempt under section
10(23C)(iiiab).
Section 10(23C)(iiiad)
Income
of any university or other educational institution existing solely for
educational purposes and not for purposes of profit would be exempt under
section 10(23C)(iiiad) if the aggregate annual receipts of such university or educational
institution do not exceed Rs. 1 Core.
Section 10(23C)(vi)
Income
of any university or other educational institution existing solely for
educational purposes and not for purposes of profit, other than those mentioned
in sub-clause (iiiab) or sub-clause (iiiad) and which may be
approved by the prescribed authority. CBDT authorize the Commissioners of
Income-tax (Exemptions) for this purpose via Notification No. 76/2014 dated
1-12-2014.
Income of Hospital [Section 10(23C)(iiiac)/(iiiae)/(via)]
Income
arises to any hospital or other institution for the reception and treatment of
persons suffering from illness or mental defectiveness or for the reception and
treatment of persons during convalescence or of persons requiring medical
attention or rehabilitation, existing solely for philanthropic purposes and not
for purposes of profit, shall be exempt from tax under following situations:
1) If the hospital or other institution
is wholly or substantially financed by the Government then exemption would be
available under section 10(23C)(iiiac).
2) If the aggregate annual receipt of
such hospital or institution do not exceed Rs. 1 Crore then exemption would be
available under section 10(23C)(iiiae).
3) If the hospital is approved by the
prescribed authority, i.e., by Commissioners of Income-tax (Exemptions) as
authorized by CBDT via Notification No. 76/2014 dated 1-12-2014 then exemption
would be available under section 10(23C)(via).
Income of mutual fund [Section 10(23D)]
Any income of following mutual funds
(subject to provisions of sections 115R to 115T) is exempt from tax:
A mutual fund registered under the
Securities and Exchange Board of India Act or regulation made thereunder.
A mutual fund set-up by a public
sector bank, or a public financial institution or authorised by RBI (subject to
conditions notified by the Central Government).
Income of a registered trade union [Section 10(24)]
Any
income chargeable under the head “Income from house property” and “Income from
other sources” of a registered union within the meaning of the Indian Trade
Union Act, 1926, formed primarily for the purpose of regulating the relation
between workmen and employers or between workmen and workmen is exempt from
tax. Similar exemption is available to an association of registered unions.
Income of provident fund [Section 10(25)]
Following income is exempt from tax under this section:
Interest on securities held by a
statutory provident fund and any capital gains arising from such securities.
Any income received by the trustee
on behalf of a recognised provident fund or an approved superannuation fund or
an approved gratuity fund; and
Any income received by the Board of
Trustees on behalf of Deposit-linked Insurance Fund.
Income of the Employees’ State Insurance Fund [Section
10(25A)]
Any
income of the Employees’ State Insurance Fund of the Employees’ State Insurance
Corporation set-up under the provisions of the Employees’ State Insurance Act,
1948 is exempt from tax under section 10(25A).
Income of minor [Section 10(32)]
Under
section 64(1A) income of a minor child is clubbed along with the income of
his/her parent, subject to certain conditions.. If the income of
an individual includes any income of his/her minor child, then such individual
can claim exemption (in respect of each minor child) of lower of following
amount:
(a) Rs. 1,500 per minor child; or
(b) Amount of income of each minor child (which is
clubbed).
Capital gains on transfer of US 64 [Section 10(33)]
As
per section 10(33), long-term or short-term capital gains arising on transfer
of units of Unit Scheme, 1964 (US 64) are exempt from tax if the transfer of
such asset takes place on or after 1/04/2002.
Dividends and interest on units [Section 10(34)/(35)]
Following incomes are not chargeable to tax from the
assessment year 2004-05:
•
Any
income by way of dividends covered by section 115-O [i.e., any dividends
from a
domestic
company other than dividends covered under section 2(22)(e)];
However, as per section 115BBDA (as inserted by Finance Act, 2016), in the case
of resident individual/HUF/firm, dividend shall be chargeable to tax at the
rate of 10% if aggregate amount of dividend received during the year exceeds
Rs. 10,00,000.
•
Any
income in respect of units of a mutual fund;
•
Income
received by a unit holder of UTI;
•
Income
in respect of units of a specified company.
Note:
1.
Under
section 115-O and section 115R, the person paying the dividends on share or
income on units will have to pay distribution tax on dividend/income
distributed.
2. It should be noted that under this
clause, Income on transfer of units is not exempt.
Income of certain non-profit body or authority [Section
10(42)]
Any
specified income of non-profit body/authority notified by the Central
Government and established, constituted or appointed under a multilateral
treaty agreement or convention to which Central Government is a signatory is
exempt from tax under section 10(42).
Loan in the case of reverse mortgage [Section 10(43)]
Any
amount received by an individual as a loan (either in lump sum or in
instalments) in a transaction of reverse mortgage referred to in section
47(xvi), is not chargeable to tax.
Income of New Pension System Trust [Section 10(44)]
With
effect from assessment year 2009-10, any income received by any person for, or
on behalf of the New Pension System Trust established on 27-2-2008 under the
provisions of the Indian Trust Act, 1882 will be exempt from tax.
Any
notified allowance or perquisite paid to the Chairman/retired Chairman or any
other member/retired member of the UPSC [Section 10(45)]
As
per section 10(45), any allowance or perquisite, as may be notified by the
Central Government in the Official Gazette in this behalf, paid to the Chairman
or a retired Chairman or any other member or retired member of the Union Public
Service Commission is exempt from tax.
Any income of a notified infrastructure debt fund set-up in
accordance with prescribed guidelines [Section 10(47)]
As
per section 10(47), any income of a notified infrastructure debt fund set-up in
accordance with the guidelines prescribed in Rule 2F of the Income-tax Rules is
exempt from tax.
Any
income of a foreign company on account of sale of leftover stock of crude oil
[Section 10(48B)]
Section
10(48B) provides that any income accruing or arising to a foreign company on
account of sale of leftover stock of crude oil, if any, from a facility in
India after the expiry of an agreement or an arrangement or on termination of
said agreement in accordance with the terms mentioned therein shall be exempt
subject to such conditions as may be notified by the Central Government in this
behalf.
Tax exemption to National Financial Holdings Company Limited
[Section 10(49)]
As
per section 10(49), any income of the National Financial Holdings Company
Limited, being a company set-up by the Central Government, of any year relevant
to any assessment year commencing on or before the 1st day of April, 2014 is
exempt from tax.
Income subject to equalisation levy [Section 10(50)]
Any income arising from specified services which is
chargeable to equalisation levy is exempt from tax.
Reference : incometaxindia.gov.in
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