SOME EXEMPTED INCOMES LECTURE III-PIMSR

WHAT IS EXEMPTED INCOMES

The incomes specifically mentioned as exempt under the Income-tax Act, 1961 are not subjected to tax. Sec.10, sec.10A, sec.10B, sec.11 and sec.12 specifies the exempted incomes.

SOME EXEMPTIONS U/s.10

1. Agricultural Income; 2. Amount received by a member of HUF or partner of a Firm, out of income of the HUF/Firm which has been subjected to tax. (that is; the proportionate share in the firms total income); 3.Any income specifically exempted by the Govt.(Tax-free interest on securities etc.) 4.Leave Travel Concession to the extent of actual expenses; 5.The salary of any foreign official of a foreign Embassy, High Commission, Consulate, etc. in India. (Provided that he has no other income as professional etc. in India)

EXEMPTION U/S.10 (Contd)

6. Salary of a merchant navy official of a foreign ship, unless his stay in India during the year is less than 90 days; 7. Remuneration of an employee of a foreign state during his training in India under Govt. or Govt. Company/society. 8.Royalty or fees for technical services received from Govt. or on account of an agreement with Govt. 9. Allowance or perquisite paid outside India by the Govt. to a citizen of India for rendering service outside India; 10. Remuneration received by a an individual from a foreign state, for services rendered in India, as per agreement with

EXEMPTION U/S.10 (Contd)

11. Income earned by the member of family of such employee, if it has been subjected to tax in that foreign country; 12. Gratuity (Death-cum-Retirement) from Govt., or under Payment of Gratuity Act or any other Gratuity to an extent of months average salary for the years of service or Rs.3,50,000/- whichever is less; (Aggregate from all the employers)(Max. EL 30 days) 13. Retrenchment compensation or amount of VRS compensation up to a maximum of Rs.5,00,000/ 14.Perquisites of an employee, if employer paid the FBT; 15. Insurance Policy paid. (If employer pays premium, not to exceed 20% of salary);

EXEMPTION U/S.10 (Contd)

16. Any amount received from Provident Fund or approved Superannuation Fund; 17. Any allowance to meet the expenses of duties; 18. Interest or premium on securities if the Govt. so specifies; 19. Scholarships to meet the cost of education; 20.Daily allowance and Constituency allowance of an MP or MLA/MLC or

EXEMPTION U/S.10 (Contd)

21. Awards and Rewards given by the Govt. or institute or body approved by Central Govt. 22.Pension or family pension of an awardee of a gallantry award (eg.Param Vir Chakra, Maha Vir Chakra or Vir Chakra etc.) ; 23. Family pension of a member of Armed forces if the death in the course of duty; 24.Income of a local authority which Panchayat, Municipality, Municipal Committee, District Board, or Cantonment Board; 25. Income of an approved Scientific Research Association (Conditions apply);

EXEMPTION U/S.10 (Contd)

26. Income of approved News Agency; or agency to control, supervise, regulate or encourage profession of law, medicine, accountancy, engineering or architecture etc; 27.Income of a Mutual Fund (but the interest on units are taxable) 28.Dividends and LTCG of Venture Capital Fund or Infrastructure Capital Company or income of a Venture Capital Company; 29. Rent income or other income of a Trade Union; 30. Income of a Scheduled Tribe of North Eastern Region or Ladakh accrued from that area; 31. Dividends and interest on Mutual Fund Units

EXEMPTION UNDER OTHER SECTIONS

Income of newly established undertaking in free trade zones, etc.- u/s.10A Income of newly established undertaking in Special Economic Zones, etc. u/s.10AA Income of newly established undertaking in 100% export oriented undertakings.u/s.10B; Income of an undertaking engaged in export of certain articles or things u/s.10BA. Income of certain IndustrialUndertakings in Noth Eastern Region u/s.10C. Income from property held for charitable or religious purposes-u/s.11.