EXEMPTED

INCOME
To: Dr. Pooja Sikka
By: Parneet Kaur
LLB-2nd year
Roll no. 22
 Table of Contents
01 SECTION 10(10C)
Compensation on voluntary
04 SECTION 10(11)
retirement
Any lump sum payment from a
02 SECTION 10(10CC) provident fund
Tax on non monetary prerequisites
paid by his employer
05 SECTION 10(12), (13)
Any payment from an approved
03 SECTION 10(10D) superannuation fund

Any sum received under a life

insurance policy 06 SECTION 10(13A)
House Rent Allowance (HRA)
 WHAT IS EXEMPTED INCOME?

Any income which does not form part of total

income is exempted income and is given under
sections 10-13B. Such incomes are either wholly
exempted from tax or exempted upto a certain
limit. Therefore, such incomes, either wholly or
up to the exempted limit, are not included in the
total income of an assessee while computing his
Total Income
01 SECTION 10(10C)
Compensation on voluntary retirement
Any amount received or receivable by an employee of following employer on his voluntary retirement or termination
of his service, in accordance with scheme of voluntary retirement (VRS) or voluntary separation (in case of a public
sector company) shall be exempted:
a public sector company; or
any other company; or
an authority established under a Central, State or Provincial Act; or
a local authority;
a co-operative society; or
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 University Grants Commission Act, 1956; or
an Indian Institute of Technology within the meaning of Section 3(g) of the Institutes of Technology Act, 1961; or
any State Government; or
the Central Government; or
an institution, having importance throughout India or in any State or States, as notified by the Central Government in
this behalf; or
such institute of management as notified by the Central Government in this behalf.
 AMOUNT OF EXEMPTION
The amount of exemption is the least of the following
Compensation actually received;
The Specified amount i.e., Rs 5,00,000
 Exemption can be claimed if following Guidelines laid down under Rule 2BA
of Income-tax Rules, 1962 are fulfilled:
(a) Employee must have completed 10 years of service or 40 years of age;
(b) The scheme applies to all employees including workers and executives of a
company or authority or co-operative society except director of a company or
co-operative society;
(c) The scheme of voluntary retirement (VRS) or voluntary separation must be
resulting in overall reduction of existing strength of the employees;
(d) The vacancy caused by voluntary retirement (VRS) or voluntary separation
must not be filled up;
(e) The retiring employee of a company shall not be employed in another
company or concern belonging to same management;
02 SECTION 10(10CC)
Tax on non monetary prerequisites paid by his
employer
Where assessee (employee) is an individual and receives non-
monetary perquisites within the meaning Section 17(2) and
the tax on such non-monetary perquisites is actually paid by
his employer then tax so paid shall be exempted in the hands
of employee.
03 SECTION 10(10D)
Any sum received under a life insurance policy
 Any sum including bonus received under a life
insurance policy, is exempted.

Any sum received Any sum received Annual premium payable

under section under a Keyman exceeds ten percent of
80DD(3) Insurance Policy the annual capital sum

Any sum received on the death

of a person is exempted
A ULIP is an insurance plan that
offers the dual benefit of
investment to fulfil your long-
term goals, and a life cover` to
financially protect your family in
case of an unfortunate event. The
premium paid towards a ULIP is
divided into two parts.
04 SECTION 10(11), (12)
Any lump sum payment from a provident fund
 Any lump sum received by assessee during the
current previous year:
(i) from a provident fund to which the Provident
Funds Act, 1925 applies; or
(ii) from any other provident fund set up by the
Central Government is exempted.
 CONDITIONS
● The employee must have rendered continuous service
for five years with his employer.
● Where the employee could not have render continuous
service for five years with his employer because of the
following reasons:
● Health of the employee
● Discontinuation of business by the employer
● Due to unavoidable circumstances for the employee.
● Where at the time of retirement, the employee obtains
the employment with a new employer and Lump sum
amount received from such present employer is
transferred to Employee’ RPF Account with the new
employer.
05 SECTION 10(13)
Any payment from an approved superannuation fund
 ● On the death of a beneficiary
● By way of refund of contribution on the
death of a beneficiary
● By way of transfer to the account of the
employee under a pension scheme
06 SECTION 10(13A)
House Rent Allowance (HRA)
 WHAT IS HOUSE RENT ALLOWANCE

HRA is a special allowance specifically granted to

an employee (assessee) by his employer to meet
expenditure actually incurred on payment of rent in
respect of residential accommodation occupied by
the assessee.
 AMOUNT OF EXEMPTION
HRA actually Rent paid in
received; or excess of 1/10 of
salary; or
Whichever
is less

50% of salary if 40% of salary if

residence is in residence is at
metropolitan city; any other place
or
EXEMPTION IS NOT ALLOWED WHEN
-where assessee lives in the residential
accommodation of his own
- where assessee does not pay rent; or
- where rent paid is not in excess od 1/10 of salary
 THANK YOU
HAVE A GREAT
DAY AHEAD