Share |

"Rule 4: Exempted Incomes"


There are innumerable incomes under the Income Tax Law which are exempted from the purview of tax. These incomes are known as exempted incomes.

For example, interest income from tax-free bonds as also any income from agriculture are some items of exempted incomes.


There are other exempted incomes also which are discussed in Chapter IV of this book. Proper planning of your investments in a way so as to generate tax exempt incomes is another golden rule of tax planning.

Zero-tax status

Oh, yes! You can achieve zero-tax status if all your income taken together in one financial year does not exceed ` 2,00,000. Thus, income tax is payable only when the net taxable income of financial year 201 2-2013 for an individual tax payer, exceeds ` 2,00,000. Besides, there are innumerable options when you may have annual income much higher than ` 2,00,000 — it may even run into a few Lakh and Crore — but still you may not be required to pay income tax. This is possible only when your income in excess of ` 2,00,000 in a financial year arises from tax-free sources. One such example is the interest income arising to an individual from Tax free Bonds issued by various public sector companies. The interest on these bonds, irrespective of the amount would be completely exempt from income tax notwithstanding the fact that the income may far exceed ` 2,00,000 in the FY 2012-2013 relevant to the AY 2013-2014. Similarly, the dividends received from companies are also tax exempted.



More Topics ...
Rule-1 : Spread Your Income Among Your Family Members under Income Tax Act.
Rule-2 : Take Full Advantage Of All Tax Exemptions under Income Tax Act.
Rule-3 : Take Full Advantage Of Tax Deductions under Income Tax Act.
Rule-4 : Exempted Incomes under Income Tax Act.
Rule-5 : Don’t Overdo It — Keep Tax Planning Simple under Income Tax Act.
Get Updated ...
Tally.ERP 9 Book
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Budget 2017-2018 GST (FAQ, Law, Act. Rules, Schedule, Enrollment)

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications