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Exempted Incomes : Sec.10(4B) to Sec.10 (6)

 

6.      Interest paid to a person of Indian Origin and who is Non-Resident [Section 10(4B)]

In case of an individual, being a citizen of India or a person of Indian origin, who is nonresident, any income from interest on such savings certificates issued by the Central Government, as Government may specify in this behalf by notification in the Official Gazette, shall be fully exempt. The exemption under this section shall not be allowed on bonds or securities issued on or after 1-6-2002.

This exemption shall be allowed only if the individual has subscribed to such certificates in Foreign Currency or other foreign exchange remitted from a country outside India in accordance with the provisions of the Foreign Exchange Act, 1973, FEMA, 1999 and any rules made there under.

For this purpose, a person shall be deemed to be of Indian origin if he or either of parents or any of his grandparents, was born in India or in undivided India.

7. Leave Travel Concession [Section 10(5)]

An employee can claim exemption under section 10(5) in respect of Leave Travel Concession. Exemption under section 10(5) is available to all employees (i.e. Indian as well as foreign citizens).

 

Exemption is available in respect of value of any travel concession or assistance received or due to the employee from his employer (including former employer) for himself and his family members in connection with his proceeding on leave to any place in India. Other provisions to be kept in mind in this regard are as follows:

 

Where journey is performed by air: Amount of exemption will be lower of amount of economy class air fare of the National Carrier by the shortest route or actual amount spent.

 

Where journey is performed by rail: Amount of exemption will be lower of amount of airconditioned first class rail fare by the shortest route or actual amount spent. The same rule will apply where journey is performed by any other mode and the place of origin of journey and destination are connected by rail.

 

Where the place of origin and destination are not connected by rail and journey is performed by any mode of transport other than by air:

The exemption will be as follows:

 

(a)       If recognised public transport exists: Exemption will be lower of first class or deluxe class fare by the shortest route or actual amount spent.

 

(b)       If no recognised public transport exists: Exemption will be lower of amount of airconditioned first class rail fare by the shortest route (considering as if journey is

performed by rail) or actual amount spent.

 

Block: Exemption is available for 2 journeys in a block of 4 years. The block applicable for current period is calendar year 2014-17. The previous block was of calendar year 2010-2013.

 

Carry over: If an employee has not availed of travel concession or assistance in respect of one or two permitted journeys in a particular block of 4 years, then he is entitled to carry over one journey to the next block. In this situation, exemption will be available for 3 journeys in the next block. However, to avail of this benefit, exemption in respect of journey should be utilised in the first calendar year of the next block. In other words, in case of carry over, exemption is available in respect of 3 journeys in a block, provided exemption in respect of at least 1 journey is claimed in the first year of the next block.

 

Exemption is in respect of actual expenditure on fare, hence, if no journey is performed, then no exemption is available.

 

Family: Family will include spouse and children of the individual, whether dependent or not and parents, brothers, sisters of the individual or any of them who are wholly or mainly dependent on him.

 

Exemption is restricted to only 2 surviving children born after October 1, 1998 (multiple births after first single child will be considered as one child only), however, such restriction is not applicable to children born before October 1, 1998.

8.      Remuneration received by an individual who is not a citizen of India [Section 10(6)]

The following incomes are exempt when received by an individual who is not a citizen of India:

(i) Remuneration [U/s 10(6)(ii)].

          (a)     The remuneration received by an ambassador or other officials of the Embassy, High Commission or Legation of a foreign State in India.

          (b)     The remuneration by a consular officer of a foreign State in India.

          (c)     The remuneration received by a trade commissioner or other official representative in India of a foreign State, provided corresponding officials of      the Government of India in that country are given a similar concession.

          (d) The remuneration received by a member of the staff of any of the officials referred to in (a), (b) and (c) above.

If the person mentioned above in (a) to (d) is a subject of the country represented, is not engaged in any business, profession or employment in India (otherwise than as a member of such staff), and the country represented gives similar concession to the members of the staff of corresponding officials of the Government of India.

(ii) Remuneration received by him as an employee of foreign enterprise [U/s 10(6)(vi)]

(e.g., technician deputed by a foreign firm to work in India), for service rendered by him during his stay in India provided the following conditions are fulfilled—(a) the foreign enterprise is not engaged in any trade or business in India ; (b) his stay in India does not exceed in the aggregate a period of 90 days in such previous year ; and (c) such remuneration is not liable to be deducted from the income of the employer chargeable under the Act.

(iii) Employment on a foreign ship [U/s 10(6)(viii)].

Any income chargeable under the head “Salaries” received by or due to any such individual being a non-resident, as remuneration for service rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate of a period of 90 days in the previous year.

(iv) Remuneration received by an employee of foreign govt. during his stay in India for his training in India [U/s 10(6)(xi)].

Such remuneration shall be fully exempted if he is taking training in any of the following concern

          (a)     Institution owned by govt

          (b)     A company wholly owned by Central or State govt. or partly owned by Central and partly by State govt

          (c)     A subsidiary Co. of company referred at point (b) above

          (d)     Any corporation established by or under Central, State or Provincial Act

          (e)     Any society registered under Societies Registration Act; 186Q and which     is wholly financed by Central or State govt.
 
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