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Exempt Incomes

Exempt Incomes

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Published by Prashant Kalia
exempted income in income tax!
exempted income in income tax!

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Published by: Prashant Kalia on Mar 25, 2011
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03/25/2011

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EXEMPT INCOMES
 
SectionType of assessee Type of income ExemptamountRemarks
10(1) All assessees Agricultural income. No limit See definition S. 2(1A). Incomederived from any land or building for anypurpose other than agriculure would betaxable.10(2) Member of HUF Sum paid out of incomeof family or income of impartible estate.No limit Subject to the provision of S. 64(2).10(2A)A person being a partner of afirmShare in the total incomeof the firm separatelyassessed as a firm.No limit For share of the partner see explanationto this sub-section.10(4)(i)Non-resident Interest on specifiedsecurities or bonds.No limit See clause 1(A) under topic “Taxation of Non Residents” No securities or bondsto be specified on or after 1-6-2002. For specified securities, see Notification No.SO-3331, dated 19.10.65.10(4)(ii)Individual, being residentoutside India under FERApermitted by RBI to maintainNRE accountInterest from NREaccount.No limit The exemption which was withdrawnfrom 1st April, 2005 has been restored.10(4B)Non-resident being a citizen of India or a person of IndianoriginInterest on specifiedsaving certificate issuedbefore 1-6-2002subscribed in foreigncurrency.No limit See clause 1(A) for non-resident andclause 3(A) for Specified Certificateunder topic “Taxation of Non Residents”.10(5) Individual. Value of any travelconcession or assistance received byorder to him.Amount of expencesactuallyincurred.Refer salary topic for more details.10(7) Citizen of India Allowances operquisites byGovernment for services renderedoutside India.No limit 10(10D)All assessees Any sum received undea life insurance policyincluding bonus.No limit The following amount shall not beexempt:
 
1 Amount received from aninsurance company on death of dependent being a person withdisability in respect of aninsurance policy issued to himfor the maintenance of suchdependent.2 Amount received under aKeyman Insurance Policy [For definition of "Keyman InsurancePolicy", refer to Explanation tothis sub-section.]3 Sum received under aninsurance policy issued on or after 1-4-2003, where premium
 
payable for any of the yearsexceeds 20% of the actualcapital sum assured unless suchsum is received on death of aperson.10(11) All assessees Payments from astatutory P.F. or publicP.F. or from notified P.F.No limit For Notified P.F.refer Notification No.SO 2430 dated 2.7.1968.10(12) Salaried employee Accumulated balancesdue from recognisedprovident fund.Full amountaccumulated balance.Employee has put in 5 or more years of service or termination of service due tohis ill health or closure of employersbusiness or the balance from recognisedP.F. is transferred to another recognisedfund.10(13) Salaried employee Payment from approvedsuperannuation fund.Full amount Payment is on death or superannuation,on retirement after specified age or hisbecoming incapacitated prior to suchretirement.10(15)(i)All assessees Income by way ointerest, premium onredemption or other payment from notifiedsecurities, bonds,certificates, etc. issuednotified by CentralGovernment.Limits asspecified intheNotificationPlease refer Page No.10.610(15)(iib)Individual or HUF Interest on notifiedcapital investmentbonds.No limit No bonds to be specified on or after 1-6-2002.10(15)(iic)Individual or HUF Interest on notified RelieBonds.No limit 10(15)(iid)Individual who is NRI at thetime of acquisition of the bondsor his successor or the doneeInterest on notifiedBonds being NRI Bonds1988, NRI Bonds(second series) issuedby SBI.No limit No exemption available in the year of premature encashment.No bonds to bespecified on or after 1-6-200210(15)(iv)(c)Non resident Interest payable byindustrial undertaking onmoney borrowed or debtincurred prior to 1-6-2001 in foreign countryin respect of purchase of raw materials,components or plant andmachinery and approvedby Central Governmentincluding usance interestpayable outside India byan undertaking engagedin the business of shipbreaking in respect of purchase of a ship fromoutside India.No limit
 
10(15)(iv)(fa)NR or NOR Interest paid by ascheduled bank on RBIapproved foreigncurrency deposits,FCNR and RFCaccounts.No limit The exemption which was withdrawnfrom 1-4-2005 has been restored.
 
10(15)(vi)All assessees Interest on Gold DepositBond Scheme, 1999.No limit 10(15)(vii)All assessees Interest on notifiedbonds issued by a localauthority.No limit Ahmedabad notified vide 812(E) dt. 21-08-2001,364(E) dt. 16-03-2004 and113(E) dt. 24-03-2005, Hyderabadnotified vide 275(E) dt. 04-03-2002,Nashik notified vide 269(E) dt. 7-03-2003, Tamil Nadu notified vide 545(E)dt. 12-05-2003 and Chennai notifiedvide 392(E) dt. 23-03-2004 and 114(E)dt. 24-03-2005, Karnataka notified vide941(E), dt. 20-08-2004.10(16) Individual Scholarship granted tomeet cost of education.No limit 10(17A)All assessees Payment in cash/kind asaward instituted byCentral/StateGovernment or awardinstituted by the CentralGovernment approvedbody.No limit 10(18) Central or State GovernmentemployeePension. No limit Such employee is awarded Param ViChakra or Maha Vir Chakra or Vir Chakra or such other notified gallantryaward.
 
Any family member of anemployee referred aboveFamily Pension. No limit 10(19) Widow, children or nominatedheir of a member of the armedforces (including paramilitaryforces) of the Union.Family Pension. No limit Where the death of such member of thearmed forces (including paramilitaryforces) has occurred in the course of operational duties, in suchcircumstances and subject to suchconditions as may be prescribed.10(23AAA)Any person on behalf of employees welfare fundAny income. No limit 1 Fund is approved by CIT.
 
2 The income is applied or accumulated for applicationtowards objects of the fundonly.3 The funds are invested aspermitted u/s. 11(5).4 The approval shall have effectfor 3 years at a time.10(23F)Approved Venture CapitalFund or Venture CapitalCompanyDividend and LTCG inrespect of equity sharesof a Venture Capitalundertaking.No limit It shall not apply to investment madeafter 31-3-1999.10(23FA)Same as per S. 10(23F) Dividend other thanreferred in Section 115-O and LTCG in respectof equity shares of aventure capitalundertakingNo limit 1 Approved by Central Government.
 
2 It shall not apply to investmentmade after 31-3-2000.10(23 Venture Capital Fund (VCF) or Any income. No limit 1 VCF/VCC granted registration

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