Incomes which are totally exempted from Tax – Part II

In continuation of the last article with respect to exempt income, here’s the list of some more incomes which are also exempt from tax as per the provisions of section 10 of the Act: §               Commuted pension received by an employee upto specified limit u/s 10(10A). §               Encashment of earned leave after retirement upto specified limit u/s 10(10AA). §               Any death cum retirement gratuity received from employer upto specified limit u/s 10(10). §               Any compensation received by a workman at the time of retrenchment under the specified act or order. §               Compensation received or receivable by an individual or his legal heir from the central or state government or local authority on account of any disaster will be exempt from tax with retrospective effect from FY 2004-05. §               Accumulated balance due and becoming payable to an employee participating in a recognized provident fund to the extent provided. §               House Rent Allowances to the specified extent. §               Receipt on account of specified Voluntary Retirement Scheme (VRS) upto Rs. 5, 00, 000 provided the assessee has not claimed relief u/s 89. §               Remuneration received by a foreign national as an employee of a foreign enterprise for services rendered by him during his stay in India provided his stay in India does not exceed 90 days in previous year and the foreign enterprise is not engaged in any business or trade in India. §               Any income chargeable under the head ‘Salaries’ received by or due to any such individual being a non-resident as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate period of 90 days  in the previous year. §               Remuneration received by a foreign national as 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 any undertaking. §               For individual serving in India in connection with any co-operative technical assistance programmes and projects under an agreement entered into by the Central Government and the foreign government (i) the remuneration received from the foreign government for such duties, (ii) any other income of such individual accruing outside India and not deemed to accrue or arise in India, which become taxable in the respective country. §               For consultants, any remuneration or fee received out of the funds made available to an international organisation under a technical assistance grant agreement between such organisation and a foreign government and any other income, which accrues outside India and is not deemed to accrue or arise in India, and the same become taxable in the respective country. §               Individual who is assigned to duties in India in connection with any technical assistance programme and project in accordance with an agreement entered into by the Central Government and the international organisation the remuneration received by him from any consultant referred to in sec 10(8A) – 10(8B). §               Any payment made under the Bhopal Gas Leak Disaster Act, 1985 except payment made to any assessee to the extent such assessee has been allowed a deduction under the Income Tax Act on account of any loss caused by such disaster.

  • In case of non-resident, tax paid by government or an Indian company other than salary, royalty or technical fees under an approved agreement entered into between the parties before 1.6.2002.
  • Income by way of interest, premium, or redemption or other payment on notified securities, bonds or certificates.
  • Any income by way of interest received by a non-resident or a person who is not ordinarily resident in India, on a deposit made on or after 1.4.2005 in an offshore banking unit of the Special Economic Zones Act, 2005.
  • Individuals carrying on the business of growing and manufacturing rubber, coffee, cardamom or such other commodity in India, the amount of any subsidy received from the concerned board under any scheme for replantation or replacement of plants or for rejuvenation or consolidation of area used for cultivation.
  • Any amount received as loan either in lump sum or in instalment on reverse mortgage in case of senior citizen with effect from 2008-09.
  • Income received for or on behalf of the New Pension System Trust established under the provision of Indian Trust Act. Any payment to same will not be subject to deduction of tax at source.

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