Incomes which are totally exempted from Tax – Part I

Every income received by an individual whether in cash or in kind is chargeable to tax but there is still some specified incomes which are exempt from tax even though the same is earned and received during the year, it is not liable to tax and is not considered as a part of the total income of the assessee. The income may be fully exempt from tax, may exempt upto the extent specified or may exempt from the operation of any specified provision of the Income Tax. Following are the list of incomes which are fully exempt from the tax: §               Agricultural Income u/s 10(1). §               Receipt by a member of HUF out of the income of the family or out of the estate belonging to the family. §               Share of profit from partnership firm u/s 10(2A). §               Interest income on money standing to his credit in non-resident (external) account. §               In case of NRI, interest income on notified Govt. securities and bonus including income by way of premium on the redemption of such bond. §               In case of NRI being an Indian citizen or a person of Indian origin, any income from interest on notified saving certificates issued by the central government before 01.06.2002, provided such certificates has been subscribed out of convertible foreign exchange remitted from a country outside India. §               Remuneration received by a foreign citizen as an official of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign state,  or as a member of the staff of any official will be exempt from tax if corresponding Indian official in that foreign country enjoy a similar exemption. §               Any allowances or perquisites paid or allowed outside India by the government to an Indian citizen for providing services outside India. §               The value of any travel concession or assistance received by or due to him. §               Payment from approved superannuation fund on the death of a beneficiary or in other specified circumstances. §               Any payment from a provident fund to which the Provident Fund Act applies. §               Any sum received under a life insurance policy including the sum allocated by way of bonus on such policy. §               Scholarship granted to meet the cost of education u/s 10(16). §               Pension received by individual who has been awarded gallantry awards or family pension received by any member of such individual u/s 10(18). §               Family pension received by the widow, children or nominated heir of a member of the armed forces including para-military forces of the union if the death of such member has occurred in the course of operational duties. §               Any income by way of dividend u/s 10(34). §               Any income arising from transfer of a capital asset being a unit of the Unit Scheme and mutual fund   specified u/s 10(23D). §               Any income arising from the transfer of a long term capital assets being an eligible equity shares in a company purchased on or after 1.3.2003 and before 1.3.2004 and held for a period of 12 months or more u/s 10(36). §               Any income arising from the transfer of a long term capital assets being an eligible equity shares in a company or unit of an equity oriented fund u/s 10(38), provided such transfer is chargeable to securities transaction tax. We at have the expertise in handling issues relating to individual taxation. We at provide full year support solving all your tax issues, in addition to filing of your return of income with excellent tax planning. Contact us at “”, we are here to help you to solve all your tax issues.

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