TAX FREE INCOME UNDER INCOME TAX LAW.
Introduction: To reduce the income tax burden of any person in legal way, it is important to understand the exemptions . such exemptions are sometimes unconditional or conditional also. some of the exemptions are available to particular person only where as others are subject to tax. in certain cases some of the income of a person are exempt where as other incomes are taxable . therefore it is important to understand the exemptions. here a list is given of tax free/exempted income and this list must be read along with relevant provisions of relevant section , rules, notification and circulars issued as well as judicial precedence. in the case of conditional exemptions all the conditions must be checked then only exemptions should be claimed.
|
Section |
Nature of exemption |
Who are entitled for exemption |
Relevant Rule |
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| (1) | (2) | (3) | (4) | |||||||||
| 10(1) |
Agricultural income Note: Agricultural income defined u/s 2(1A) which include rent or revenue derived from land, income by agricultural operation, income of farm house. |
Any assessee | 7, 7A, 7B, 8 | |||||||||
| 10(2) | Amount received by member of family out of family income, or in case of impartible estate, amount received out of income of family estate | Individual as member of HUF | Since already taxed in the hands of HUF. | |||||||||
| 10(2A) |
Partner’s share in total income of firm Note-1: Interest on capital or loan/partner remuneration to the extent allowed as deduction in the hands of firm shall be taxable in the hands of partner. |
Partner of a firm | For taxability of Interest, partner remuneration see note-1. | |||||||||
| 10(4)(i) | Interest on securities or bonds notified before 1-6-2002 by the Central Government including premium on redemption of such bonds | Non-resident | ||||||||||
| 10(4)(ii) |
Interest received on NRE A/C [Non-resident (External) Account] with bank. |
Person resident outside India (as defined in section 2(w) of FEMA) and person who has been permitted to maintain said account by RBI | Income exempt only during the period in which individual is non resident under FEMA law. | |||||||||
| 10(4B) | Interest on notified savings certificates issued before 1-6-2002 by the Central Government and subscribed to in convertible foreign exchange | Individual (Indian citizen or person of Indian origin, who is a non-resident) | ||||||||||
| 10(4C) | Interest payable by an Indian company or business trust in respect of monies borrowed from a source outside India by way of issue of Rupee Denominated Bonds as referred to in section 194LC(2)(ia), during the period September 17, 2018 to March 31, 2019 | A non-resident, not being a company, or to a foreign company | – | |||||||||
| 10(4D) | Any income accrued or arisen or received as a result of transfer of capital asset [as referred to in section 47(viiab)] on a recognized stock exchange located in any IFSC, provided consideration for such transaction is paid or payable in convertible foreign exchange, to the extent such income accrued or arisen to, or is received in respect of units held by a non-resident | Category III Alternative Investment Fund located in an IFSC | ||||||||||
| 10(5) |
Leave travel concession or assistance (subject to prescribed conditions and limited to amount actually spent) Note: 2nd proviso added to section 10(5) as under: Provided further that for the assessment year beginning on the 1st day of April, 2021, the value in lieu of any travel concession or assistance received by, or due to, such individual shall also be exempt under this clause subject to the fulfilment of such conditions (including the condition of incurring such amount of such expenditure within such period), as may be prescribed. Rule 2B also amended. |
Individual – Salaried employee | 2B, 26C see note-1. Amendment by finance act 2021 where exemption based on purchases of GST paid goods or services @12% GST (combined) or above and purchase during 01-10-2020 to 31-03-2021. | |||||||||
|
10(6)(ii) |
Remuneration received by specified diplomats and their staff | Individual (non-citizen of India) | ||||||||||
| 10(6)(vi) | Remuneration received as employee of foreign enterprise for services rendered during stay in India (subject to certain conditions) | Individual – Salaried employee (non-citizen of India) | ||||||||||
| 10(6)(viii) | Remuneration received for services rendered in connection with employment on a foreign ship (subject to certain limits) | Individual – Salaried employee (non-resident, non-citizen of India) | ||||||||||
| 10(6)(xi) | Remuneration received as employee of foreign Government in connection with his training in Government offices/statutory undertakings, etc. | Individual – Salaried employee (foreign citizen) | ||||||||||
| 10(6A) | Tax paid by Government or Indian concern on royalty/fees for technical services from Government or Indian concern under agreement made before 1-6-2002 which either relates to a matter included in the industrial policy of the Government and is in accordance with that policy or is approved by Central Government | Foreign company | ||||||||||
| 10(6B) | Tax paid by Government or Indian concern under terms of agreement entered into before 1-6-2002 by Central Government with Government of foreign State or international organisation on income derived from Government or Indian concern, other than income by way of salary, royalty or fees for technical services |
Non-resident (other than company) or foreign company |
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| 10(6BB) |
Tax paid by Indian company, engaged in the business of operation of aircraft, who has acquired an aircraft or its engine on lease, under an approved (by Central Government) agreement entered into between 31-3-1997 and 1-4-1999, or after 31-3-2007, on lease rental/income |
Government of foreign State or foreign enterprise | ||||||||||
| 10(6C) | Income by way of royalty or fees for technical services rendered in India or abroad in projects connected with security of India pursuant to agreement with Central Government | Notified foreign company | ||||||||||
| 10(6D) | Any income arising to a non-resident, not being a company, or a foreign company, by way of royalty from, or fees for technical services rendered in or outside India to, the National Technical Research Organisation | Non-resident/foreign company | ||||||||||
| 10(7) | Foreign allowances or perquisites paid or allowed by Government to its employees posted abroad | Individual – Salaried employee (Indian citizen) | ||||||||||
| 10(8) | Foreign income and remuneration received from foreign Government for services rendered in connection with any co-operative technical assistance programmes and projects in accordance with agreement entered into by Central Government and foreign Government (subject to certain conditions) | Individual | ||||||||||
| 10(8A) | Foreign income and remuneration received by consultant (agreement relating to his engagement must be approved) out of funds made available to an international organisation (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State |
Non-Indian citizen/ Indian citizen who is not ordinarily resident in India/non- resident, engaged by the agency for rendering technical services in India |
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| 10(8B) | Foreign income and remuneration received by an employee of the consultant referred to in section 10(8A) | Non-Indian citizen/ Indian citizen who is not ordinarily resident in India (contract of service must be approved by the prescribed authority before commencement of service) | ||||||||||
| 10(9) | Income of any member of family of any individual [referred to in section 10(8), 10(8A) or 10(8B)] which accrues or arises outside India and is not deemed to accrue or arise in India and which is subject to tax in that foreign country | Individual | ||||||||||
| 10(10)(i) | Death-cum-retirement gratuity received by Government servants | Individual – Salaried employee | Maximum Rs. 20,00,000 is the limit specified in case of retirement, etc., on or after 29-3-2018 vide Notification No. SO 1213(E), dated 8-3-2019 | |||||||||
| 10(10)(ii) | Gratuity received under the Payment of Gratuity Act, 1972 | Individual – Salaried employee | (maximum Rs. 20,00,000) | |||||||||
| 10(10)(iii) | Any other gratuity received by employee/legal heirs on retirement, termination of services, death, etc., limited to half month’s salary for each year of completed service (subject to certain conditions) | Individual – Salaried employee | maximum limit Rs. 20,00,000 | |||||||||
| 10(10A) | Payment in commutation of pension received from Government/Private employer (subject to certain limits)/LIC Fund u/s 10(23AAB) | Individual – Salaried employee | ||||||||||
| 10(10AA) | Amounts by way of encashment of unutilised earned leave on retirement limited to 10 months’ salary (subject to certain conditions) | Individual – Salaried employee | [maximum limit Rs. 3,00,000 (in case of retirement after 1-4-1998)] | |||||||||
| 10(10B) | Retrenchment compensation [maximum limit is Rs. 5,00,000] | Individual – Workman | ||||||||||
| 10(10BB) | Payments made under Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 and any scheme framed thereunder (subject to certain conditions) | Any assessee | ||||||||||
| 10(10BC) | Compensation on account of any disaster received/receivable from Government/local authority (subject to certain conditions) | Individual or his legal heir | ||||||||||
| 10(10C) | Payment received or receivable (not exceeding Rs. 5,00,000) on voluntary retirement in accordance with scheme framed in accordance with prescribed guidelines. | Individual – Employee of a public sector company, any other company, an authority established under a Central, State or Provincial Act, a local authority, co-operative societies, universities, IITs, any State Government, Central Government, notified institution having importance throughout India or in any State or States, or notified institutes of management | 2BA | |||||||||
| 10(10CC) | Tax paid by employer on perquisite (not provided for by way of monetary payment) given to employees | Individual – Salaried employee | ||||||||||
| 10(10D) | Any sum received under a life insurance policy including bonus on such policy but excluding sums received u/s 80DDA(3) and under a Keyman insurance policy. | Any assessee | ||||||||||
| 10(11) | Payment from PPF(public provident fund)/statutory provident fund | Individual/Hindu undivided family | ||||||||||
| 10(11A) | Any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014/2016 | Any assessee | ||||||||||
| 10(12) |
Accumulated balance payable to employee participating in recognised provident fund (subject to certain conditions) |
Individual – Salaried employee | ||||||||||
| 10(12A) | 60% of total amount paid by National Pension Scheme Trust (NPS) to an assessee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD | Individual [All subscribers (employee/non-employee) of NPS] | ||||||||||
| 10(12B) | Any payment from the National Pension System Trust to an employee under the pension scheme referred to in section 80CCD, on partial withdrawal made out of his account in accordance with specified terms and conditions, to the extent it does not exceed 25% of the amount of contributions made by him | Individual-employee | ||||||||||
| 10(13) | Payment from approved superannuation fund in specified circumstances and subject to certain limits | Individual | ||||||||||
| 10(13A) | House rent allowance (subject to certain limits)
Note: no exemption if assessee has not actually incurred expenditure on payment of rent; or residential accommodation occupied by the assessee is owned by him. |
Individual – Salaried employee | 2A, 26C | |||||||||
| 10(14) | Prescribed allowances or benefits | Individual – Salaried employee | 2BB | |||||||||
| 10(15)(i) |
Interest, premium on redemption, or other payment on notified securities, bonds, certificates, and deposits, etc. (subject to notified conditions and limits) |
All assessees | ||||||||||
| 10(15)(iib) | Interest on notified Capital Investment Bonds notified prior to 1-6-2002 | Individual/HUF | ||||||||||
| 10(15)(iic) |
Interest on notified Relief Bonds |
Individual/HUF | ||||||||||
| 10(15)(iid) | Interest on notified bonds (notified prior to 1-6-2002) purchased in foreign exchange (subject to certain conditions) | Individual – NRI/nominee or survivor of NRI/individual to whom bonds have been gifted by NRI | ||||||||||
| 10(15)(iii) | Interest on securities | Issue Department of Central Bank of Ceylon | ||||||||||
| 10(15)(iiia) | Interest on deposits made with scheduled bank with approval of RBI | Bank incorporated abroad | ||||||||||
| 10(15)(iiib) | Interest payable to Nordic Investment Bank | Nordic Investment Bank | ||||||||||
| 10(15)(iiic) | Interest payable to the European Investment Bank on loan granted by it in pursuance of framework-agreement dated 25-11-1993 for financial corporation between Central Government and that bank | European Investment Bank | ||||||||||
| 10(15)(iv)(a) | Interest received from Government or from local authority on moneys lent to it before 1-6-2001 or debts owed by it before 1-6-2001, from sources outside India | All assessee who have lent money, etc., from sources outside India | ||||||||||
| 10(15)(iv)(b) |
Interest received from industrial undertaking in India on moneys lent to it under a loan agreement entered into before 1-6-2001 |
Approved foreign financial institution | ||||||||||
| 10(15)(iv)(c) | Interest at approved rate received from Indian industrial undertaking on moneys lent or debt incurred before 1-6-2001 in a foreign country in respect of purchase outside India of raw materials, components or capital plant and machinery, subject to certain limits and conditions | All assessee who have lent such money, or in favour of whom such debt has been incurred | ||||||||||
| 10(15)(iv)(d) | Interest received at approved rate from specified financial institutions in India on moneys lent from sources outside India before 1-6-2001 | All assessee who have lent such moneys | ||||||||||
| 10(15)(iv)(e) | Interest received at approved rate from other Indian financial institutions or banks on moneys lent for specified purposes from sources outside India before 1-6-2001 under approved loan agreement | All assessees who have lent such moneys | ||||||||||
| 10(15)(iv)(f) | Interest received at approved rate from Indian industrial undertaking on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2001 | All assessees who have lent such moneys | ||||||||||
| 10(15)(iv)(fa) | Interest payable by scheduled bank, on deposits in foreign currency when acceptance of such deposits by bank is approved by RBI | Non-resident or individual/HUF who is not ordinarily resident in India | ||||||||||
| 10(15)(iv)(g) | Interest received at approved rate, from Indian public companies eligible for deduction under section 36(1)(viii) and formed with main object of providing long-term housing finance, on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2003 | All assessees who have lent such moneys | ||||||||||
| 10(15)(iv)(h) | Interest received from any public sector company in respect of notified bonds or debentures and subject to certain conditions | All assessee | ||||||||||
| 10(15)(iv)(i) |
Interest received from Government on deposits in notified scheme out of moneys due on account of retirement |
Individual – Employee of Central Government/State Government/Public sector company | ||||||||||
| 10(15)(v) | Interest on securities held in Reserve Bank’s SGL A/c No. SL/DH-048 and Deposits made after 31-3-1994 for benefit of victims of Bhopal Gas Leak Disaster held in such account with RBI or with notified public sector bank | Welfare Commissioner, Bhopal Gas Victims, Bhopal | ||||||||||
| 10(15)(vi) | Interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by Central Government | All assessee | ||||||||||
| 10(15)(vii) | Interest on notified bonds issued by a local authority/State Pooled Finance Entity | All assessee | ||||||||||
| 10(15)(viii) | Interest on deposit made on or after 1-4-2005 in an Offshore Banking Unit referred to in section 2(u) of the Special Economic Zones Act, 2005 | Non-resident or person who is not ordinarily resident | ||||||||||
| 10(15)(ix) | Interest payable by a unit located in an International Financial Services Centre in respect of monies borrowed by it on or after September 1, 2019 | Non-Resident | – | |||||||||
| 10(15A) |
Any payment made by an Indian company, engaged in business of operation of aircraft, to acquire an aircraft or an aircraft engine on lease from the Government of a foreign State or a foreign enterprise (person who is non-resident) under approved agreement entered into on or after 1-4-1999 but before 1-4-2007. However, payment made for providing spares, facilities or services in connection with operation of leased aircraft is excluded |
Foreign State/Enterprise | ||||||||||
| 10(16) | Educational scholarship | Individual | ||||||||||
| 10(17)(i) | Daily allowance | Individual – Member of Parliament/State Legislature/Committee thereof | ||||||||||
| 10(17)(ii) | Any allowance received by MP under Members of Parliament (Constituency Allowance) Rules, 1986 | Member of Parliament | ||||||||||
| 10(17)(iii) | Any constituency allowance received | Individual – Member of State Legislature | ||||||||||
| 10(17A)(i) | Amount received in pursuance of award (whether in cash or kind) instituted in public interest by Central/State Government or approved award instituted by other body | Any assessee | ||||||||||
| 10(17A)(ii) | Reward (whether in cash or kind) received from Central/State Government for approved purposes in public interest | Any assessee | ||||||||||
| 10(18) | Pension received by an individual who has won specified/notified gallantry awards and family pension received by any family member of such individual | Individual – Central/State Government employee or his family member | ||||||||||
| 10(19) | Family pension received by the widow, children or nominated heirs of a member of the armed forces (including para-military forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances) | Individual (widow, children or nominated heirs of member of armed forces) | 2BBA | |||||||||
| 10(19A) | Notional annual value of any one palace occupied by former ruler | Individual | ||||||||||
| 10(20) |
Specified incomes of a local authority1 |
Local authority1 | ||||||||||
| 10(21) | Income of approved research associations subject to certain conditions | Research Association | 17 | |||||||||
| 10(22B) | Income of notified news agency set up in India solely for collection and distribution of news (subject to certain conditions) | News agencies | ||||||||||
| 10(23A) | Income of approved professional bodies other than income from house property, income received for rendering specific services and income by way of interest or dividends (subject to certain conditions) | Professional associations | ||||||||||
| 10(23AA) | Income received on behalf of regimental fund or non-public fund established by armed forces | Regimental fund or non-public fund | ||||||||||
| 10(23AAA) |
Income of approved fund established for notified purposes for welfare of member employees or their dependents (subject to certain conditions) |
Approved fund | 16C | |||||||||
| 10(23AAB) | Income of fund set up by LIC or any other insurer under an approved pension Scheme (subject to certain conditions) | Fund set up by LIC or any other insurer | ||||||||||
| 10(23B) | Income of institution existing solely for development of khadi or village industries (subject to certain conditions)
note: income is attributable to the business of production, sale, or marketing, of khadi or products of village industries: |
Public charitable trust/registered society | Commission shall not, at any one time, grant such approval for more than 3 AY beginning with the AY next following the financial year in which it is granted. | |||||||||
| 10(23BB) | Income of authority established for development of khadi or village industries | Authority established under State or Provincial Act | Also refer section 24A of the The Khadi And Village Industries Commission Act, 1956 | |||||||||
| 10(23BBA) |
Income of a body or authority established for administration of public religious or charitable trusts or endowments, etc. |
Body/Authority established, constituted or appointed under Central, State or Provincial Act | ||||||||||
| 10(23BBB) | Income of EEC from interest, dividends or capital gains from investment of funds under specified scheme | European Economic Community | ||||||||||
| 10(23BBC) | Income of SAARC Fund for Regional Projects set up by Colombo Declaration issued on 21-12-1991 | SAARC Fund for Regional Projects | ||||||||||
| 10(23BBD) | Any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI – Secretariat under the Societies Registration Act, 1860 for a period of 10 assessment years relevant to assessment years beginning on 1-4-2001 | Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI – Secretariat | ||||||||||
| 10(23BBE) | Income of Insurance Regulatory and Development Authority (IRDA) |
IRDA |
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| 10(23BBF) | Income of North-Eastern Development Finance Corporation Limited (subject to certain limits) | North-Eastern Development Finance Corporation Limited | ||||||||||
| 10(23BBG) | Income of Central Electricity Regulatory Commission | Central Electricity Regulatory Commission | ||||||||||
| 10(23BBH) |
Income of Prasar Bharati (Broadcasting Corporation of India) |
Prasar Bharati (Broadcasting Corporation of India) | ||||||||||
| 10(23C)(i) to (iiiaaaa) | Income received by any person on behalf of specified Prime Minister’s Funds1 or National Foundation for Communal Harmony or the Swachh Bharat Kosh or the Clean Ganga Fund set up by the Central Government or Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund as referred to in section 80G(2)(a)(iiihf) | Any person concerned | ||||||||||
| 10(23C) (iiiab) | Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government | University/other educational institution | 2BBB | |||||||||
| 10(23C) (iiiac) | Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government | Hospital/Nursing Home, etc. | 2BBB | |||||||||
| 10(23C) (iiiad) | Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees | University/other educational institution | 2BC | |||||||||
| 10(23C) (iiiae) |
Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees |
Hospital/Nursing Home, etc. | 2BC | |||||||||
| 10(23C) (iv)/(v)1 | Income received by any approved charitable fund or institution and approved public religious/charitable trust or institution (subject to certain conditions) | Charitable/Religious trusts and institutions | 2C/16CC | |||||||||
|
10(23C)(vi)1 |
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiab) and 10(23C)(iiiad) and which is approved by the prescribed authority (subject to certain conditions) | University/other educational institution | 2C/16CC | |||||||||
| 10(23C) (via)1 | Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiac) and 10(23C)(iiiae) and which is approved by the prescribed authority (subject to certain conditions) | Hospital/Nursing Home, etc. | 2C/16CC | |||||||||
| 10(23D) | Income of Mutual Fund registered under SEBI Act, 1992 and notified Mutual Fund set up by public sector bank or public financial institution or authorised by RBI, subject to notified conditions | Mutual Fund registered under SEBI Act, 1992, and Notified Mutual Fund set up by public sector bank or financial institution or authorised by RBI | ||||||||||
| 10(23DA) | Income of a securitization trust from the activity of securitization | Securitization Trust | ||||||||||
| 10(23EA) |
Income, by way of contributions received from recognised stock exchanges and members thereof, of notified Investor Protection Fund set up by recognized stock exchanges in India either jointly or separately (subject to certain conditions) |
Investor Protection Fund | ||||||||||
| 10(23EB) | Income of Credit Guarantee Fund Trust for Small Industries created by Government of India and SIDBI | Credit Guarantee Trust Fund | ||||||||||
| 10(23EC) |
Contributions received from commodity exchanges and members thereof (subject to certain conditions) |
Notified Investor Protection Funds set up by Commodity Exchanges in India | ||||||||||
| 10(23ED) | Income by way of contributions received from a depository of a notified Investor Protection Fund (subject to certain conditions) | Notified Investor Protection Fund | ||||||||||
| 10(23EE) | Specified income of notified Core Settlement Guarantee Fund set up by a recognised clearing corporation (subject to certain conditions) | Notified Core Settlement Guarantee Fund | ||||||||||
| 10(23F) | Dividends or long-term capital gains of approved venture capital fund/venture capital company from investments made before 1-4-1999 by way of equity shares in a venture capital undertaking (subject to certain conditions) | Approved venture capital fund/venture capital company | 2D | |||||||||
| 10(23FA) | Any income by way of dividends (other than dividends referred to in section 115-O), or long-term capital gains of approved venture capital funds and venture capital companies from investments made by way of equity shares in a venture capital undertaking (subject to certain conditions) (exemption is not available in respect of investments made after 31-3-2000) | Approved venture capital funds/venture capital companies | 2DA | |||||||||
| 10(23FB) |
Income of a venture capital company or venture capital fund from investment in a venture capital undertaking (with effect from assessment year 2016-17, not applicable to venture capital company or venture capital fund, being an investment fund specified in Explanation 1(a) to section 115UB) |
Venture capital company/fund | ||||||||||
| 10(23FBA) | Any income of an investment fund other than income chargeable under the head “Profits and Gains of business or profession” | Investment Fund | ||||||||||
| 10(23FBB) | Any income referred to in section 115UB, accruing or arising to or received by, a unit holder of an investment fund, being that proportion of income which is in the same nature as income chargeable under the head “Profits and Gains of business or profession” | Unit holder of an investment fund | ||||||||||
| 10(23FC) | Any income of a business trust by way of interest received or receivable from a special purpose vehicle (i.e., Indian company in which the business trust holds controlling interest and any specified percentage of shareholding or interest) or dividend | Business Trust | ||||||||||
| 10(23FCA) | Any income of a business trust, being a real estate investment trust, by way of renting or leasing or letting out any real estate asset owned directly by such business trust | Business trust, being a real estate investment trust | ||||||||||
| 10(23FD) | Any distributed income, referred to in section 115UA, received by a unit-holder from the business trust, not being that proportion of the income which is of the same nature as the income referred to in section 10(23FC)(a)/10(23FCA) [with effect from 1-4-2021, section 10(23FC)(a) (i.e., interest) or section 10(23FC)(b) (i.e., dividend, where Special Purpose Vehicle has exercised the option under section 115BAA) or section 10(23FCA)] | Unit holder | ||||||||||
| 10(23FE) | Income in the nature of dividend, interest or long-term capital gains arising from an investment made by it in India, whether in the form of debt or share capital or unit, in a business trust referred to in section 2(13A)(i) or a company or enterprise carrying on the business of developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility as defined under section 80-IA(4)(i) or such other business as the Central Government may notify or Category I or Category II Alternate investment fund (AIFs). The investment should be made on or after 1-4-2020 but on or before 31-3-2024 and should be held for at least 3 years. |
(The exemption is allowed if the prescribed conditions are satisfied) |
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| 10(24) | Income of trade union under the heads ‘Income from house property’ and ‘Income from other sources’ | Registered trade union/associations of registered trade unions | ||||||||||
| 10(25) | Interest on securities and capital gains on sale of securities held by provident fund to which Provident Funds Act, 1925 applies/income received by trustees on behalf of recognised provident fund, approved superannuation fund, approved gratuity fund and deposit-linked insurance fund in certain cases | Retirement benefit funds | ||||||||||
| 10(25A) | Income of ESI Fund set up under ESI Act, 1948 | Employees’ State Insurance Fund | ||||||||||
| 10(26) | Specified income of member of specified Scheduled Tribes residing in specified areas.
Income exempt: any income (a) from any source in the areas or States aforesaid, or (b) by way of dividend or interest on securities;] |
Individual (member of specified Scheduled Tribe) | specified areas States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura or in the Ladakh region of the State of Jammu and Kashmir | |||||||||
| 10(26AAA) | Income from any source in the State of Sikkim or income by way of dividend or interest on securities (subject to certain conditions) | Sikkimese individual (other than Sikkimese woman who, after 31-3-2008, marries non-Sikkimese) | ||||||||||
| 10(26AAB) | Any income of agricultural produce market committee/board constituted under any law for time being in force for purpose of regulating marketing of agricultural produce | Agricultural produce market committee/board | ||||||||||
| 10(26B) | Income of Central/State Corporation or Government financed body, institution or association established for promoting interests of members of Scheduled Castes, Scheduled Tribes and/or Backward Classes | Government corporation/body, institution or association wholly financed by Government | ||||||||||
| 10(26BB) | Income of corporation established by Government for promoting interests of members of minority community | Government corporation | ||||||||||
| 10(26BBB) | Income of corporation established by Central, State or Provincial Act for welfare and economic upliftment of Indian Ex-servicemen who are citizens of India | Government corporation | ||||||||||
| 10(27) | Income of certain co-operative societies formed for promoting the interests of Scheduled Castes/Scheduled Tribes members | Co-operative societies | ||||||||||
| 10(29A) | Income accruing or arising to the Coffee Board, the Rubber Board, the Tea Board, the Tobacco Board, the Marine Products Export Development Authority, the Agricultural and Processed Food Products Export Development Authority, the Spices Board and the Coir Board. | Respective Boards and Authorities | ||||||||||
| 10(30) | Subsidy received from or through Tea Board under notified scheme for re-plantation/replacement of tea bushes, etc. (subject to certain conditions) | All assessee (engaged in business of growing/manufacturing tea in India) | ||||||||||
| 10(31) | Subsidy received from or through concerned Board under notified scheme for replantation/replacement of rubber/coffee/cardamom plants, etc. (subject to certain specified conditions) | All assessee (engaged in business of growing/manufacturing rubber/coffee, etc., in India) | ||||||||||
| 10(32) | Income of minor child clubbed u/s 64(1A) to the extent of Rs. 1,500 per child | Any individual | ||||||||||
| 10(33) | Any income arising from the transfer of a capital asset (long-term/short-term) being a unit of US 64 [referred to in Schedule I of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002] and where the transfer of such assets takes place on or after 1-4-2002 | All assessee | ||||||||||
| 10(34)1 | Income by way of dividends referred to in section 115-O(from the assessment year 2017-18 to assessment year 2020-21 any income by way of dividend in excess of Rs. 10 lakh shall not be exempt from tax in the case of a resident individual, resident HUF or a resident firm) | All assessees | ||||||||||
| 10(34A) | Income arising to a shareholder on account of buy-back of shares by a company referred to in section 115QA (including listed companies) | Any assessee being a shareholder | ||||||||||
| 10(35)2 | Income received in respect of (a) units of a mutual fund specified under section 10(23D), (b) units from the Administrator of the specified undertaking as defined in UTI (Transfer of Undertaking & Repeal) Act, 2002, or (c) units from the specified company as defined in above UTI Repeal Act, 2002 (however, income arising from transfer of units of the Administrator of specified undertaking or of specified company/mutual fund, is not exempt) | All assessee | ||||||||||
|
10(35A) |
Income by way of distributed income referred to in section 115TA received before 1-6-2016 from a securitization trust by any investor of the trust | Any person being an investor of the trust | ||||||||||
| 10(36) | Income arising from transfer of a long-term capital asset being an eligible equity share in a listed company purchased on or after 1-3-2003 but before 1-3-2004 and held for a period of 12 months or more | All assessee | ||||||||||
| 10(37) | Any income chargeable under the head ‘capital gains’ arising from transfer of agricultural land situate in an urban area mentioned in section 2(14)(iii)(a)/(b) where transfer is by way of compulsory acquisition or consideration for transfer is determined/approved by Central Government/RBI and income has arisen from compensation or consideration for such transfer received by such assessee on or after 1-4-2004 (subject to certain conditions) | Individual/HUF | ||||||||||
| 10(37A) |
Any income chargeable under the head ‘Capital Gains’ in respect of a transfer of a specified capital asset, arising to assessee, being an individual or a HUF, who was the owner of such an asset as on 2-6-2014 and who has transferred such asset under Land Pooling Scheme covered under Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made under provisions of Andhra Pradesh Capital Region Development Authority Act, 2014 (subject to certain conditions) |
Individual or HUF | ||||||||||
| 10(39) | Specified income arising from any notified international sporting event held in India (subject to certain conditions) | Notified persons | ||||||||||
| 10(40) |
Income of subsidiary company by way of grant or otherwise received from an Indian holding company engaged in business of generation or transmission or distribution of power if receipt of such income is for settlement of dues in connection with reconstruction or revival of existing business of power generation (subject to certain conditions) |
Company | ||||||||||
| 10(41) | Income arising from transfer of capital asset of undertaking engaged in business of generation or transmission or distribution of power where such transfer is effected on or before 31-3-2006 to Indian company notified under section 80-IA(4)(v)(a) | Any assessee | ||||||||||
| 10(42) | Specified income arising to a body or authority which (a) has been established/constituted/appointed under a treaty or agreement entered into by Central Government with two or more countries or a convention signed by Central Government, (b) is established/constituted/appointed not for the purposes of profit, (c) is notified by the Central Government for purposes of this clause | Body or authority | ||||||||||
| 10(43) | Amount received as loan, either in lump sum or in instalments, in transaction of reverse mortgage referred to in section 47(xvi) | Any individual | ||||||||||
| 10(44) | Any income of New Pension System Trust established on 27-2-2008 under Indian Trusts Act, 1882 |
Any person for or on behalf of New Pension System Trust |
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| 10(45) (omitted with effect from 1-4-2021) | Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC | Individual | ||||||||||
| 10(46) | Any specified income arising to any notified body/authority/Board/Trust/Commission (by whatever name called) (or a class thereof) which has been established or constituted under an Act or has been constituted by the Government with the object of regulating or administering any activity for the benefit of the general public and is not engaged in any commercial activity | Body/authority/Board/Trust/Commission (by whatever name called) (or a class thereof) | ||||||||||
| 10(47) | Any income of a notified infrastructure debt fund set up in accordance with prescribed guidelines | Infrastructure debt fund | 2F | |||||||||
| 10(48) | Any income received in India in Indian currency by a foreign company on account of sale of crude oil or any other goods or rendering of services as may be notified by the Central Government, to any person in India under an approved and notified agreement or arrangement (subject to certain conditions) | Foreign company | ||||||||||
| 10(48A) | Any income accruing or arising to a foreign company on account of storage of crude oil in a facility in India and sale of crude oil therefrom to any person resident in India (subject to certain conditions) | Foreign company | ||||||||||
|
10(48B) |
Any income accruing or arising to a foreign company on account of sale of leftover stock of crude oil, if any, from the facility in India after the expiry of the agreement or the arrangement referred to in clause (48A) (w.e.f. 1-4-2019) : or on termination of said agreement or the arrangement in accordance with the terms mentioned therein, as the case may be, (subject to such conditions as may be notified by the Central Government in this behalf). |
Foreign company | ||||||||||
| 10(48C) | Any income accruing or arising to Indian Strategic Petroleum Reserves Limited (ISPRL) as a result of arrangement for replenishment of crude oil stored in its storage facility in pursuance of directions of Central Government. [Exemption not available if the crude oil not replenished within 3 years from the end of the financial year in which crude oil was removed from the storage facility for the first time.] | Indian Strategic Petroleum Reserves Limited (ISPRL) | ||||||||||
| 10(49) | Income of the National Financial Holdings Company Limited (being a company set up by the Central Government) of any previous year relevant to any assessment year commencing on or before 1-4-2014. | National Financial Holdings Company Limited | ||||||||||
| 10(50) | Any income arising from any specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 [ Equalisation Levy] comes into force (i.e., 1-6-2016), or arising from any e-commerce supply or services made or provided or facilitated on or after 1-4-2021, and chargeable to equalisation levy under that chapter. | Any assessee |
If equalisation levy , income tax shall be exempt. |
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| 10A |
Profits of undertakings situated in free trade zones, electronic hardware technology parks or software technology park or any special economic zone from export of articles or things or computer software (subject to certain conditions and clarifications)1 |
All assessee | 16D, 16DD | |||||||||
| 10AA | 100% of profits from export of articles/things/services for 5 consecutive assessment years beginning with assessment year relevant to previous year in which the unit begins to manufacture or produce article or things or provide services and 50% of profits for next 5 assessment years and up to 50% of profits for next 5 assessment years as is debited to P&L account and credited to ‘Special Economic Zone Re-investment Reserve Account’ (subject to certain conditions) | Entrepreneur referred to in section 2(j) of Special Economic Zones Act, 2005 who begins to manufacture/produce article/thing or provide any service on or after 1-4-2006 [but before 1-4-2021] | ||||||||||
| 10B | Profits derived by a 100 % export-oriented undertaking (subject to certain specified conditions) | All assessee | 16E | |||||||||
| 10BA | Profits of an undertaking from export of handmade articles of artistic value which requires the use of wood as the main raw material (subject to certain conditions) | All assessee | 16F | |||||||||
| 11 | Income from property held for charitable or religious purposes (subject to certain conditions)
Note: must be registered u/s 12A/AA/AB and satisfying other conditions like 85% utilization of general donation, no benefit to specified person etc. |
Charitable/religious trust/institution | 17, 17C | |||||||||
| 13A | Specified income of political parties | Registered political parties | 6ABBA | |||||||||
| 13B | Voluntary contributions received by Electoral Trust (subject to certain conditions) | Electoral trust |
17CA |
- In relation to the employees who retire or become incapacitated prior to such retirement or die on or after 29-3-2018 or whose employment is terminated on or after the said date.
- Exemption cannot be claimed if any relief under section 89 has been allowed for any assessment year in relation to the amount.
- To get the benefit of exemption under section 10(10D), annual premium paid on an insurance policy should not exceed the following percentage of sum assured –
|
Policy on the life of a person with disability or severe disability referred to in section 80U, or on the life of a person suffering from disease or ailment as specified in rule 11DD/section 80DDB |
Policy on the life of any other person who is not disable or suffering from specified illness. | |||
| 1. | If policy was issued before April 1, 2003 | Any % of sum assured | Any % of sum assured | |
| 2. | If policy was issued on or after April 1, 2003 but before April 1, 2012 | 20% of sum assured* | 20% of sum assured* | |
| 3. | If policy was issued during 2012-13 | 10% of sum assured** | 10% of sum assured** | |
| 4 | If policy is issued on or after April 1, 2013 | 15% of sum assured** | 10% of sum assured** | |
*Sum assured does not include any premium agreed to be returned and/or any benefit by way of bonus.
**Sum assured means minimum amount assured under the policy without including any premium agreed to be returned and/or any benefit by way of bonus.
A Keyman insurance policy which has been assigned to a person during its term, with or without consideration, shall continue to be treated as a Keyman insurance policy for the purposes of clause (10D) of section 10.
Note-1: 2nd proviso added to section 10(5) as under: Provided further that for the assessment year beginning on the 1st day of April, 2021, the value in lieu of any travel concession or assistance received by, or due to, such individual shall also be exempt under this clause subject to the fulfilment of such conditions (including the condition of incurring such amount of such expenditure within such period), as may be prescribed. Rule 2B also amended.
Rule 2B, new clause inserted as under:
Rule 2B (1A) For the assessment year beginning on the 1st day of April, 2021, where the individual referred to in sub-rule (1) avails any cash allowance from his employer in lieu of any travel concession or assistance, the amount exempted under the second proviso to section 10(5) shall be the amount, not exceeding ₹36000/- per person, for the individual and the member of his family, or one-third of the specified expenditure, whichever is less, subject to fulfilment of the following conditions, namely:-
(i) the individual has exercised an option to avail exemption under the second proviso of clause (5) of section 10, in lieu of the exemption under clause (5) of section 10 in respect of one unutilised journey during the block of four calendar years commencing from the calendar year 2018;
(ii) the payment in respect of the specified expenditure is made by the individual or any member of his family to a registered person during the specified period;
(iii) the payment in respect of the specified expenditure is made by an account payee cheque drawn on a bank or account payee bank draft, or use of electronic clearing system through a bank account or through such other electronic mode as prescribed under rule 6ABBA; and
(iv) the individual obtains a tax invoice in respect of specified expenditure from the registered person referred in clause (ii).
Explanation 1- For the purpose of this sub-rule,-
(i) ‘tax invoice’ means an invoice issued by the registered person under section 31 of the Central Goods and Services Tax Act, 2017 (No. 12 of 2017);
(ii) ‘registered person’ means registered under GST.
(iii) ‘specified expenditure’ means expenditure incurred by an individual or a member of his family during specified period on goods or services, which are liable to tax at an aggregate @12% (CSGT+ SGST or IGST) or above and goods are purchased or services procured from GST registered vendors or service providers;
(iv) ‘Specified period’ means the period commencing from the 12th day of October, 2020 and ending on the 31stday of March, 2021.
Explanation 2 -For the removal of doubt, it is hereby clarified that if the amount received by or due to an individual, as per the terms of his employment, from his employer in relation to himself and member of his family, in connection with the specified expenditure is in excess of the thirty six thousand rupees per person, for the individual and the member of his family, the exemption under this sub-rule would be restricted to thirty-six thousand rupees per person, for the individual and the member of his family, or one-third of the specified expenditure, whichever is less.
Explanation 3- It is hereby clarified that the clarification issued by the Department of Expenditure, Ministry of Finance, vide OM F. No 12(2)/2020-EII (A) Dated 12th October, 2020 and any subsequent clarifications, if any, issued in this regard shall apply mutatis mutandis to the exemption under this sub-rule.
(1B) Where an exemption under the second proviso to clause (5) of section 10 is claimed and allowed, sub-rule (2) shall have effect as if for the words ‘two journeys’, the words ‘one journey’ has been substituted ]
- Exemption is restricted to Panchayat, Municipality, etc.
- PM CARES FUND is added with effect from 1-4-2020.
- Finance Act, 2020, has laid down new approval procedures. See also Press release, dated 8-5-2020 .
- No exemption under section 10(34) shall be available for the dividend received on or after 1-4-2020 (other than dividend on which tax under sections 115-O and 115BBDA, wherever applicable, has been paid).
- No exemption u/s 10(35) shall be available for income in respect of units received on or after 1-4-2020.
- Exemption is available upto and including the assessment year 2011-12.
- Finance Act, 2020 has provided for new registration procedures for charitable/religious trusts.
