EXEMPTED INCOME

Exempted income

Following incomes are exempted from tax under section 10 of income tax act 1916 and they do not form part of total income:

  1. Agricultural income in India [sec 10 (1)] – following are the incomes from agricultural activity
    • Income from producing and selling agricultural products.
    • Rents from agricultural land given on a rent to someone for using, for agricultural purpose.
    • Income from farm house if certain conditions are satisfied.
    • Income from selling saplings, seeds, etc.
  1. Receipt by a member of HUF (exempted to avoid double taxation)
  2. Share in profit received by a partner from partnership firm (exempted to avoid double taxation)
  3. Interest on specified securities received is a non-resident (to encourage foreign investment)
  4. Interest on notified bonds and securities [sec 10 (15)]
  5. Educational scholarship (whether received from government or any other person)
  6. Daily allowance of members of parliament
  7. Awards or rewards received from central or state government
  8. Pension and family pension of Gallantry awards winners
  9. Family pension received by family members of armed forces.
  10. Income of approved scientific research association
  11. Income of approved professional institutions (income other than interest on securities, property income from rendering specific services to members and interest and dividend income).
  12. Income of educational institute (if certain conditions are satisfied)
  13. Income of hospitals (if certain conditions are satisfied)
  14. Income of registered trade unions or association of trade unions (only on interest or securities, property income and income from other sources are exempted
  15. Income of local authorities
  16. Dividends from Indian company (to avoid double taxation)
  17. Income from units of UTI (union trust of India)
  18. Income of minor (if income of any individual includes income of his minor child, he can claim exemption up to RS.1500. minor child under [sec 10 (2)]
  19. Long term capital gain on transfer or listed equity shares.
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