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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. Re ceipt from H UF (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. Pa rtner’ s share in the
prof it of th e 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. In te rest 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 Non-
Resident Indian Citizens [U/S
10(4B)
6. Leave Tra vel
Concess ion [ 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.
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.
8 Remuneration received by foreign nation as an
.
employee of foreign Enterprise [ U/S 10(6) (vi) ]

❚ In case of an individual who is not a


citizen of india, the exemption from
tax is available under this section in
respect of the remuneration received
by him as an employee of a foreign
enterprise for services rendered by
him during his stay in India
9 .Sal ary of Non- Res ident Em pl oy ee of
a Forei gn shi p [U/S 10( 6)

❚ The Sub-clause (vii) of section 10(6) gives the


exemption from tax in case of an individual who
is not a citizen of India and non-resident, in
respect of income chargeable under the head
Salaries received by him for service rendered in
connection with his employment on a foreign
ship. However, his total stay in India should not
exceed in aggregate a period of ninety days in
the previous years.
10. Remuner ation of t rainee of a for eign
Gover nment [U /S 10 (6) (xi) ]

❚ As per clause (xi) of sub-section (6) of


section 10, the exemption is available to
an individual who is not a citizen of India
in respect of the remuneration received by
him an employee of the government of a
foreign state during his stay in India in
connection with his training in any
establishment or office of, or in any
undertaking owned by:
❚ a) The Government
11. Tax pai d on certai n other i ncom e of
Non- Resi dent[ U/ S 10( 6B )]

❚ Incase of Non-resident or foreign company


deriving income other than salary, or Fees for
technical services from Government or an Indian
concern in pursuance of an agreement entered
into before 1st june,2002by the Central
Government with the Government of Foreign
state or international organization and the tax on
such income is payable by the Government or
Indian concern to the Central Government under
the terms that agreement approved before 1st
June,2002 by the Central Government in that
case the tax so paid is exempt from tax.
Fo reig n Allo wanc es an d p er quis ites to G ov er nme nt
Em pl oye es o utsi de In di a [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.
13. Income of an employee of a foreign
Government under Cooperative technical
Assistance programme [U/S 10(8)]

❚ In the case of an individual who is


assigned to duties in India in connection
with any cooperative technical assistance
programmes and projects in accordance
with an agreement entered into by the
Central Government and the Government
of a foreign State( the terms whereof
provide for the exemption given by this
clause) the following incomes will be
exempted from tax
❚ 14.Income of a consultant under a technical
assistant grant Agreement Between the
international organization and the Government of
foreign state [U/S 10(8A)]

❚ 15.Income of an Individual who is assigned to duties


in India in connection with any technical assistance
agreement entered and project in accordance with
an agreement entered into by the central
Government and the Agency: [U/S10(8B)].

❚ 16.Payment under the Bhopal Gas Leak


Disaster(processing of claims) Act, 1985: [U/S
10(10BB)].
employee of a public sector company
[U/S 10(10C)]

❚ At the time of his voluntary retirement or


termination of his service in accordance
with any scheme of voluntary retirement
or in case of public sector company
referred to in point (a) above, a scheme of
voluntary separation, shall be exempted
to the extent such amount does not
exceeds five rupees, shall be exempted to
the extent such amount does not exceeds
five lakh rupees
18. Tax borne by the employer on Non –monetary
perquisite provided to employee [U/S 10(10ccc)]

❚ Any amount of tax borne by the


employer on the non monetary
perquisites provided to the employee
shall be exempt u/s 10(10cc). Thus
the tax obligation of the employee
towards non-monetary perquisite
(i.e. perquisite in kind ) given by the
employer, will not be treated as
perquisite u/s 17(2).
❚ 19.Amount received in life insurance policy:[U/S
10(10)]
❚ 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.

❚ 20. 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.
❚ 21.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.

❚ 22. Payment from an approved


superannuating fund [ U/S 10(13)]
❚ 23. House rent allowance [U/S
10(13A)]
❚ 24.Special Allowance for
expenses[ U/S 10(14)]
❚ 25. 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, deposite etc. as
specified under this section is
❚ 26. 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.
❚ 27.Allowances received by the
member of parliament or state
legislature[U/S 10(17)
❚ 28. 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

❚ 29. 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.

❚ 30. Annual value of one place of a ruler[ U/S


10(19A)]