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TAX-FREE [EXEMPTED] INCOMES :

Sec.10(1) to Sec.10(50)

1

Sec. 10(1)

Agricultural Income [Section 10(1)]

As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act. As per section 2(1A), agricultural income generally means:

 

2

Sec. 10(2)

Amount received by a member of the HUF from the income of the HUF, or in case of impartible estate out of income of family estate [Section 10(2)]

As per section 10(2), amount received out of family income, or in case of impartible estate, amount received out of income of family estate by any member of such HUF is exempt from tax.

3

Sec.10(2A)

Share of profit received by a partner from the firm [Sec.10(2A)]

As per section 10(2A), share of profit received by a partner from a firm is exempt from tax in the hands of the partner. Further, share of profit received by a partner of LLP from the LLP will be exempt from tax in the hands of such partner. This exemption is limited only to share of profit and does not apply to interest on capital and remuneration received by the partner from the firm/LLP.

4

Sec. 10(4)

Certain interest to Non-Residents [Section 10(4)]

As per section 10(4)(i), in the case of a non-resident any income by way of interest on certain notified securities or bonds (including income by way of premium on the redemption of such bonds) is exempt from tax.

 

5

Sec.10(4B)

Interest on notified savings certificates [Section 10(4B)]

As per section 10(4B), in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-resident, any income by way of interest on notified savings certificates (subscribed in convertible foreign exchange) issued before the 1st day of June, 2002 by the Central Government is exempt from tax.                                       

6

Sec. 10(5)

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).

 

7

Sec. 10(6)(ii)

Remuneration Received by Specified Diplomats and their Staff [Section 10(6)(ii)]

As per section 10(6)(ii), in case of an individual who is not a citizen of India, remuneration received by him as an official (by whatever name called) of an embassy, high Commission, legation, Commission, consulate or trade representative of a foreign State, or member of the staff of any of that official is exempt from tax, if corresponding Indian official in that foreign country enjoys a similar exemption. 

8

Sec.10(6)(vi), (viii)

Salary of a foreign employee and non-resident member of crew [Sec.10(6)(vi), (viii)]

As per section 10(6)(vi), the remuneration received by a foreign national as an employee of a foreign enterprise for services rendered by him during his stay in India is exempt from tax, provided the following conditions are fulfilled—

 

9

Sec. 10(6)(xi)

Remuneration of a foreign trainee [Sec. 10(6)(xi)]

As per section 10(6)(xi), the remuneration received by a foreign trainee as an employee of foreign Government during his stay in India in connection with his training in any establishment or office of, or in any undertaking owned by,—

 

10

Sec. 10(6A)

Tax paid on behalf of foreign company deriving income by way of royalty or fees for technical services [Sec. 10(6A)]

Tax paid by Central Government, State Government or an Indian concern on behalf of a foreign company deriving income by way of royalty or fees for technical services in pursuance of an agreement made after March 31, 1976 but before June 1, 2002 will be exempt from tax in the hands of such foreign company provided such agreement is in accordance with the industrial policy of the Indian Government or it is approved by the Central Government.

11

Sec. 10(6B)

Tax paid on behalf of foreign company or non-resident in respect of other income [Sec. 10(6B)]

Tax paid by Central Government, State Government or an Indian concern on behalf of a foreign company or non-resident in respect of any income (not being salary, royalty or fees for technical services) will be exempt from tax in the hands of such foreign company or non-resident if such income is received in pursuance of an agreement entered into before June 1, 2002 by the Central Government with the Government of a foreign State or international organisation or any other related agreement approved by the Central Government.

12

Sec. 10(6BB)

Tax paid on behalf of foreign Government or foreign enterprise deriving income by way of lease of aircraft or aircraft engine [Sec. 10(6BB)]

Tax paid by an Indian company, engaged in the business of operation of aircraft, on behalf of foreign Government or foreign enterprise deriving income by way of lease of aircraft or aircraft engine will be exempt from tax in the hands of such foreign Government or foreign enterprise if such lease rental is received under an agreement which is approved by Central Government and entered during the period between 31-3-1997 to 1-4-1999, or after 31-3-2007.

13

Sec. 10(6C)

Technical fees received by a notified foreign company [Sec. 10(6C)]

Section 10(6C) grants exemption from tax in respect of income arising to notified foreign company by way of royalty or fees for technical services received in pursuance of an agreement entered into with that Government for providing services in or outside India in projects connected with security of India.

14

Sec. 10(7)

Allowance/perquisites to Government employee outside India [Sec. 10(7)]

As per section 10(7), any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India is exempt from tax.

15

Sec. 10(8)

Income of foreign Government employee under co-operative technical assistance programme [Sec. 10(8)]

As per section 10(8), remuneration received directly or indirectly by an individual, from the foreign Government in connection with a co-operative technical assistance programme and projects in accordance with an agreement entered into by the Central Government and such foreign Government, is exempt from tax. Further, exemption is available in respect of any other income of such an individual which accrues or arises outside India and is not deemed to accrue or arise in India, provided such individual is required to pay income-tax/ social security tax to the foreign Government.

16

Sec. 10(8A), (8B)

Remuneration or fees received by a non-resident consultant/its foreign employees [Sec. 10(8A), (8B)]

Under section 10(8A), (a) remuneration or fees received by a consultant* directly or indirectly out of the funds made available to an international organisation, ...

 

17

Sec. 10(9)

Income of a family member of an employee serving under co-operative technical assistance programme [Sec. 10(9)]

As per section 10(9), the income of any member of the family of any such individual as is referred to in section 10(8)/(8A)/(8B) accompanying him to India, which accrues or arises outside India and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the Government of that foreign State or country of origin of such member, as the case may be, is exempt from tax.

18

Sec. 10(10)(i)

Death-cum-retirement gratuity received by Government servants [Sec. 10(10)(i)]

Section 10(10)(i) grants exemption to gratuity received by Government employee (i.e., Central Government or State Government or local authority).

19

Sec. 10(10)(ii)

Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Sec. 10(10)(ii)]

As per section 10(10)(ii), exemption in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972 will be lower of following :

 

20

Sec. 10(10)(iii)

Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Sec. 10(10)(iii)]

As per section 10(10)(iii), exemption in respect of gratuity in case of employees not covered by the Payment of Gratuity Act, 1972 will be lower of following :

 

21

Sec. 10(10A)

Pension [Sec. 10(10A)]

As per section 10(10A), any commuted pension, i.e., accumulated pension in lieu of monthly pension received by a Government employee is fully exempt from tax.

 

22

Sec. 10(10AA)

Leave salary [Sec. 10(10AA)]

As per section 10(10AA), leave encashment by a Government employee at the time of retirement (whether on superannuation or otherwise) is exempt from tax. In the hands of non-Government employee exemption will be least of the following:

 

23

Sec. 10(10B)

Retrenchment compensation [Sec. 10(10B)]

As per section 10(10B), compensation received at the time of retrenchment is exempt from tax to the extent of lower of the following:

 

24

Sec.10(10BB)

Compensation for Bhopal Gas Leak Disaster [Sec.10(10BB)]

Compensation [in accordance with Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985] received by victims of Bhopal gas leak disaster is exempt from tax. However, compensation received for any expenditure which is allowed as deduction from taxable income is not exempt.

25

Sec. 10(10BC)

Compensation on account of any disaster [Sec. 10(10BC)]

Any amount received from the Central Government or State Government or a Local Authority by an individual or his legal heirs as compensation on account of any disaster is exempt from tax. However, no deduction is available in respect of the amount received or receivable to the extent such individual or his legal heirs has been allowed a deduction under the Act on account of loss or damage caused due to such disaster. Disaster here means any disaster due to any natural or man-made causes or by accident/negligence which results in substantial loss of human life or damage to property or environment and the magnitude of such disaster is beyond coping capacity of community of the affected area

26

Sec. 10(10C)

Payment at the time of voluntary retirement [Sec. 10(10C)]

As per section 10(10C), any compensation received at the time of voluntary retirement or termination of service is exempt from tax, if the following conditions are satisfied:

 

27

Sec.10(10CC)

Tax on perquisites paid by the employer [Sec.10(10CC)]

Perquisites to employees mean any facility provided by the employer to the employees. There are two types of perquisites, viz., monetary and non-monetary. Value of perquisite is charged to tax in the hands of the employees, however,

 

28

Sec. 10(10D)

Amount paid on life insurance policy [Sec. 10(10D)]

As per section 10(10D), any amount received under a life insurance policy, including bonus is exempt from tax. Following points should be noted in this regard:

 

29

Sec.10(11)/(12)

Exemption in respect of amount received from public provident fund/statutory provident fund/recognised provident fund/ un-recognised provident fund [Sec.10(11)/(12)]

The tax treatment of various items in case of different provident funds is as follows:

 

30

Sec. 10(12A)

Payment from the National Pension System Trust to an employee [Sec. 10(12A)]

Any payment from the National Pension System Trust to an employee on closure of account or his opting out of the pension scheme referred to in section 80CCD, to the extent it does not exceed 40 % of the total amount payable to him at the time of closureor his opting out of the scheme, is exempt from tax.

31

Sec. 10(13)

Payment from approved superannuation fund in specified circumstances and subject to certain limits [Sec. 10(13)]

Approved superannuation fund means superannuation fund which is approved by the Commissioner of Income-tax. Tax treatment of such fund is as follows:

 

32*

Sec. 10(13A)

House rent allowance [Sec. 10(13A)]

As per section 10(13A), read with rule 2A, the exemption in respect of HRA will be lower of thefollowing amounts:

 

33

Sec. 10(14)

Prescribed allowances or benefits [Sec. 10(14)]

As per section 10(14), read with rule 2BB following allowances granted to an employee are exempt from tax subject to certain limit:

 

34

Sec. 10(15)

Interest on securities [Sec. 10(15)]

Interest incomes which are exempt under section 10(15) could be explained with the help of the following table-

 

35

Sec. 10(15A)]

Lease rent of an aircraft [Sec. 10(15A)]

Lease rent of an aircraft or an aircraft engine paid to a foreign Government or to a foreign enterprise by an Indian company, engaged in the business of operation of aircraft is not taxable in the hands of such foreign Government or non-resident concern, if such payment is in pursuance of an agreement (approved by the Central Government) made before April 1, 1997 or after March 31, 1999 but before April 1, 2007. If such agreement is entered into during April 1, 1997 and March 31, 1999 or after March 31, 2007, then exemption under section 10(15A) is not available. However, in such a case, if tax on such payments is borne by the payer, then tax so borne by the payer is exempt in the hands of payee under section 10(6BB), provided agreement is approved by the Central Government.

36

Sec. 10(16)

Educational scholarship [Sec. 10(16)]

Any amount received as educational scholarship (i.e., scholarship to meet the cost of education is exempt from tax in the hands of recipient).  

37

Sec. 10(17)

Daily allowance to a Member of Parliament [Sec. 10(17)]

Following allowances are exempt from tax in the hands of a Member of Parliament and a Member of State Legislature—

 

# Daily allowance received by a Member of Parliament or by a Member of State Legislature or by member of any committee thereof.

 

# Any Constituency allowance received by a Member of State Legislature.

38

Sec. 10(17A)

Awards [Sec. 10(17A)]

Any payment received in pursuance of following (whether paid in cash or in kind) is exempt from tax:

 

       Any award instituted in the public interest by the Central Government or State Government or by any other body approved by the Central Government in this behalf.

 

       Any reward by the Central Government or any State Government for such purpose as may be approved by the Central Government in this behalf in the public interest.

39

Sec. 10(18)

Pension to gallantry award winner [Sec. 10(18)]

Pension received by an individual who was employee of the Central Government or State Government and who has been awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or any other notified gallantry award is exempt from tax. Family pension received by any member of such individual is also exempt

40

Sec. 10(19)

Family pension received by the family members of armed forces [Sec. 10(19)]

From the assessment year 2005-06, family pension received by the widow or children or nominated heirs, of a member of armed forces (including paramilitary forces) of the Union, is exempt from tax in the hands of such family members, if the death of such member of armed forces has occurred in the course of operational duty in prescribed circumstances and subject to such conditions as may be prescribed (see rule 2BBA for prescribed circumstances and conditions).

41

Sec. 10(19A)

Annual value of one palace [Sec. 10(19A)]

Annual value of any one palace in the occupation of a former ruler is exempt from tax under section 10(19A).

42

Sec. 10(20)

Income of local authority [Sec. 10(20)]

The following income of a local authority is exempt from tax:

 

43

Sec. 10(21)

Income of research association [Sec. 10(21)]

Any income of a research association, approved under section 35(1)(ii)/(iii) is exempt from tax, if following conditions as specified in section 10(21) are satisfied:

 

44

Sec. 10(22B)

Income of a news agency [Sec. 10(22B)]

Any income of a notified news agency, set-up in India solely for collection and distribution of news is exempt from tax provided that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members.

45

Sec. 10(23A)

Income of a professional association [Sec. 10(23A)]

Any income (other than income from house property and income from rendering any specific service or income by way of interest or dividend on investment) of an professional institution/association is exempt from tax, if the following conditions are satisfied:

 

46

Sec. 10(23AA)

Income received on behalf of Regimental Fund [Sec. 10(23AA)]

Any income received by any person on behalf of any Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents, is exempt from tax.

47

Sec.10(23AAA)

Income of a fund established for welfare of employees [Sec.10(23AAA)]

Any income received by any person on behalf of a fund established, for such purpose as may be notified by the Board in Official Gazette, for the welfare of employees or their dependents and of which fund such employees are members, is exempt from tax, if such fund applies or accumulates its income for exclusive application towards its objects, invests its funds in the modes specified in section 11(5) and such fund is approved by the Principal Commissioner or Commissioner in accordance with rule made in this behalf (see rule 16C and Form No. 9)

48

Sec. 10(23AAB)

Income of pension fund [Sec. 10(23AAB)]

Any income of a fund set-up by the Life Insurance Corporation of India on or after August 1, 1996 or any other insurer to which contribution is made by any person for receiving pension from such fund, and which is approved by the Controller of Insurance or the Insurance Regulatory and Development Authority, is exempt from tax.

49

Sec. 10(23B)

Income from Khadi or village industry [Sec. 10(23B)]

Income of an institution constituted as a public charitable trust or society which is established for the development of khadi and village industries (not for profit purpose) is exempt from tax, if following conditions are satisfied:

 

50

Sec. 10(23BB)

Income of Khadi and Village Industries Boards [Sec. 10(23BB)]

Any income of Khadi and Village Industries Boards is exempt from tax under section 10(23BB)

51

Sec. 10(23BBA)

Incomes of statutory bodies for the administration of public charitable trust [Sec. 10(23BBA)]

Any incomes of bodies or authority established or constituted or appointed under any Central, State or Provincial Act for the administration of public, religious or charitable trust or endowments (including any place of religious worship) or societies for religious or charitable purpose, is exempt from tax. However, this exemption shall not apply to income of any such trust, endowment, or society

52

Sec. 10(23BBB)

Income of European Economic Community [Sec. 10(23BBB)]

Any income of European Economic Community derived in India by way of interest, dividends or capital gains, from investments made out of its funds under a notified scheme is exempt from tax.

53

Sec. 10(23BBC)

Income of SAARC fund [Sec. 10(23BBC)]

Any income of SAARC fund for Regional Projects is exempt from tax under section 10(23BBC)

54

Sec.10(23BBD)

Income of Secretariat of Asian Organisation of Supreme Audit Institutions [Sec.10(23BBD)]

Any income of Secretariat of Asian Organisation of Supreme Audit Institutions is exempt from tax for the assessment years 2001-02 to 2010-11

55

Sec. 10(23BBE)

Income of Insurance Regulatory and Development Authority [Sec. 10(23BBE)]

Any income of the Insurance Regulatory and Development Authority established under section 3(1) of the Insurance Regulatory and Development Authority Act, 1999 is exempt from tax

56

Sec. 10(23BBF)

Income of North-Eastern Development Financial Corporation Limited [Sec. 10(23BBF)]

No exemption is available under section 10(23BBF) from assessment year 2010-11

57

Sec. 10(23BBG)

Income of Central Electricity Regulatory Commission [Sec. 10(23BBG)]

Income of Central Electricity Regulatory Commission is exempt from tax from the assessment year 2008-09

58

Sec. 10(23BBH)

Income of the Prasar Bharati [Sec. 10(23BBH)]

Any income of the Prasar Bharati (Broadcasting Corporation of India) established under section 3(1) of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 is exempt from tax.

59

Sec. 10(23C)(i)/(ii)/(iii)

Income of certain national funds[Sec. 10(23C)(i)/(ii)/(iii)]

Any income received by any person on behalf of the Prime Minister’s National Relief Fund, the Prime Minister’s Fund (Promotion of Folk Art) or the Prime Minister’s Aid to Students Fund is exempt from tax under clause (i), (ii) and (iii) of section 10(23C) respectively

60

Sec.10(23C)(iiia)

Income of National Foundation for Communal Harmony [Sec.10(23C)(iiia)]

Any income of National Foundation for Communal Harmony is exempt from tax under section 10(23C)(iiia).

61

Sec.10(23C)(iiiaa)

Income of Swachh Bharat Kosh [Sec.10(23C)(iiiaa)]

Income of the Swachh Bharat Kosh, set up by the Central Government is exempt under section 10(23C)(iiiaa)

62

Sec.10(23C)(iiiaaa)

Income of Clear Ganga Fund [Sec.10(23C)(iiiaaa)]

Income of the Clear Ganga Fund, set up by the Central Government is exempt under section 10(23C)(iiiaaa)

63

Sec.10(23C)

Income of Educational Institutions

[Section 10(23C)(iiiab)/(iiiad)/(vi)]

 

Section 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 would be exempt under section 10(23C)(iiiab).

 

Section 10(23C)(iiiad)

Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit would be exempt under section 10(23C)(iiiad) if the aggregate annual receipts of such university or educational institution do not exceed Rs. 1 Core

 

Section 10(23C)(vi)

Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority. CBDT authorize the Commissioners of Income-tax (Exemptions) for this purpose via Notification No. 76/2014 dated 1-12-2014

64

Sec. 10(23C)(iiiac)/(iiiae)/(via)

Income of Hospital [Sec. 10(23C)(iiiac)/(iiiae)/(via)]

Income arises to any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be exempt from tax under following situations:

 

1)         If the hospital or other institution is wholly or substantially financed by the Government then exemption would be available under section 10(23C)(iiiac).

 

2)         If the aggregate annual receipt of such hospital or institution do not exceed Rs. 1 Crore then exemption would be available under section 10(23C)(iiiae).

 

3)         If the hospital is approved by the prescribed authority, i.e., by Commissioners of Income-tax (Exemptions) as authorized by CBDT via Notification No. 76/2014 dated 1-12-2014 then exemption would be available under section 10(23C)(via).

 

65

Sec. 10(23C)(iv)

Income of Charitable Institution or Fund [Sec. 10(23C)(iv)]

Any income of a charitable institution or fund which is approved by the prescribed authority having regard to its objects and its importance throughout India or throughout any State or States is exempt from tax. CBDT has authorized Commissioners of Income-tax (Exemptions) via Notification No. 75/2014 dated 1-12-2014 for granting approval under this section                                                                    

66

Sec. 10(23C)(v)

Income of religious/charitable trust [Sec. 10(23C)(v)]

Income of any trust (including any other legal obligation) or institution formed wholly for public religious purposes or wholly for public religious and charitable purposes, which is approved by the prescribed authority having regard to the manner in which the affairs of the trust or institution are administered and supervised for ensuring that the income accruing thereto is properly applied for the objects thereof, is exempt from tax. CBDT has authorized Commissioners of Income-tax (Exemptions) via Notification No. 75/2014 dated 1-12-2014 for granting approval under this section

67

Sec.10(23C)(iv)/(v)/(vi)/(via)

Conditions for claiming exemption

[U/ Sec.10(23C)(iv)/(v)/(vi)/(via)]

In order to claim exemption under section 10(23C)(iv)/(v)/(vi)/(via), the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, had to comply with the following conditions:

 

68

Sec. 10(23D)

Income of mutual fund [Sec. 10(23D)]

Any income of following mutual funds (subject to provisions of sections 115R to 115T) is exempt from tax:

 

       A mutual fund registered under the Securities and Exchange Board of India Act or regulation made thereunder.

 

       A mutual fund set-up by a public sector bank, or a public financial institution or authorised by RBI (subject to conditions notified by the Central Government).

69

Sec. 10(23DA)

Income of a securitisation trust [Sec. 10(23DA)]

Any income of a securitisation trust from the activity of securitisation is exempt from tax

70

Sec. 10(23EA)

Income of notified investor protection fund [Sec. 10(23EA)]

Any income by way of contributions received from recognised stock exchanges and the members thereof, of a notified Investor Protection Fund set up by recognised stock exchanges in India is exempt from tax.

 

Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a recognised stock exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax.

71

Sec. 10(23EB)

Income of Credit Guarantee Fund Trust [Sec. 10(23EB)]

Any income of Credit Guarantee Fund Trust for Small Industries, being a trust created by the Government of India and the Small Industries Development Bank of India, is exempt from tax for 5 years relevant to the assessment years 2002-03 to 2006-07

72

Sec. 10(23EC)

Income of the notified investor protection fund set-up by commodity exchange [Sec. 10(23EC)]

Any income by way of contributions received from commodity exchanges and the members thereof, of a notified Investor Protection Fund set up by commodity exchanges in India is exempt from tax.

 

Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a commodity exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax.

73

Sec. 10(23ED)

Income of Investor Protection Fund set by a depository [Sec. 10(23ED)]

Any income, by way of contributions received from a depository, of notified Investor Protection Fund set up by a depository in accordance with the regulations made under the SEBI Act and Depository Act is exempt from tax.

 

Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part with a depository, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall, accordingly, be chargeable to income-tax.

74

Sec. 10(23EE)

Income of Core Settlement Guarantee Fund [Sec. 10(23EE)]

Section 10(23ED) grants exemption to Income of any specified income of such Core Settlement Guarantee Fund, set up by a recognised clearing corporation in accordance with the regulations, as the Central Government may, by notification in the Official Gazette, specify in this behalf.

 

75

Sec. 10(23FB)

Income of a venture capital fund or a venture capital company from investment in a venture capital undertaking [Sec. 10(23FB)]

Income of a venture capital fund or a venture capital company from investment in a venture capital undertaking is exempt from tax from assessment year 2001-02.  However, this exemption is subject to satisfaction of conditions specified in section 10(23FB).

 

These provisions shall not apply in respect of any income of a venture capital company or venture capital fund, being an investment fund specified in clause (a) of the Explanation 1 to section 115UB, of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2016.

76

Sec.10(23FBA)

Income of an investment fund [Sec.10(23FBA)]

Any income of an investment fund other than the income chargeable under the head "Profits and gains of business or profession” is exempt under Section 10(23FBA).

 

"Investment fund" shall have the same meaning assigned to it in clause (a) of the Explanation 1 to section 115UB.

77

Sec.10(23FBB)

Income referred to in section 115UB of a unit holder of an investment fund [Sec.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 of the same nature as income chargeable under the head “Profits and gains of business or profession" is exempt under section 10(23FBB).

 

"Investment fund" shall have the same meaning assigned to it in clause (a) of the Explanation 1 to section 115UB

78

Sec. 10(23FC)

Income of a of a Business Trust [Sec. 10(23FC)]

Any income of a business trust by way of:

 

a)         interest received or receivable from a special purpose vehicle; or

 

b)         dividend referred to in section 115-O(7)

 

“special purpose vehicle” means an Indian company in which the business trust holds controlling interest and any specific percentage of shareholding or interest, as may be required by the regulations under which such trust is granted registration.

79

Sec.10(23FCA)

Certain income of a business trust being a real estate investment trust [Sec.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 is exempt under section 10(23FCA).

 

"Real estate asset" shall have the same meaning as assigned to it in clause (zj)of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992.

80

Sec. 10(23FD)

Distributed Income of a Unit Holder from the Business Trust [Sec. 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 sub-clause (a) of clause (23FC) or clause (23FCA) of section 10 is exempt from tax.

81

Sec. 10(24)

Income of a registered trade union [Sec. 10(24)]

Any income chargeable under the head “Income from house property” and “Income from other sources” of a registered union within the meaning of the Indian Trade Union Act, 1926, formed primarily for the purpose of regulating the relation between workmen and employers or between workmen and workmen is exempt from tax. Similar exemption is available to an association of registered unions

82

Sec. 10(25)

Income of provident fund [Sec. 10(25)]

Following income is exempt from tax under this section:

       Interest on securities held by a statutory provident fund and any capital gains arising from such securities.

       Any income received by the trustee on behalf of a recognised provident fund or an approved superannuation fund or an approved gratuity fund; and

       Any income received by the Board of Trustees on behalf of Deposit-linked Insurance Fund.

83

Sec. 10(25A)

Income of the Employees’ State Insurance Fund [Sec. 10(25A)]

Any income of the Employees’ State Insurance Fund of the Employees’ State Insurance Corporation set-up under the provisions of the Employees’ State Insurance Act, 1948 is exempt from tax under section 10(25A).

84

Sec. 10(26)

Income of a member of a Scheduled Tribe [Sec. 10(26)]

Income of a member of a Scheduled Tribe [as per article 366(25) of the Constitution] is exempt from tax, if following conditions are satisfied:

 

>> Such member resides in any area in the State of Nagaland, Manipur, Tripura, Arunachal Pradesh, Mizoram or district of North Cachar Hills, Mikir Hills, Khasi Hills, Jaintia Hills and Garo Hills or in the Ladakh region of the State of Jammu and Kashmir.

 

>>  Such exemption is available in respect of income which accrues/arises from any source in such areas or income by way of dividends/interest on securities arises from any area.

 

85

Sec.10(26AA)

Income of a “Sikkimese” individual [Sec.10(26AA)]

Following income of a Sikkimese individual [as explained in section 10(26AAA)], is exempt from tax:

>> Any income from the State of Sikkim; or

>> Income by way of dividend or interest on securities(generated in Sikkim or any other place). This exemption is not available to a Sikkimese woman who, on or after April 1, 2008 marries a non- Sikkimese individual.

86

Sec.10(26AA)

Income of an Agricultural Produce Marketing Committee/Board [Sec.10(26AA)]

With effect from assessment year 2009-10, any income of an Agricultural Produce Marketing Committee/Board constituted under any law for the purpose of regulating the marketing of agricultural produce is exempt from tax under section 10(26AAB)

87

Sec. 10(26B)

Income of corporation or other body or institution or association established for promoting the interest of members of Scheduled Caste, etc. [Sec. 10(26B)]

Any income of a corporation established by a Central, State or Provincial Act or of any other body, institution or association (wholly financed by the Government), formed for promoting the interests of the members of the Scheduled Castes/Tribes/backward classes or of any two or all of them [as explained in section 10(26B)], is exempt from tax under section 10(26B).

88

Sec. 10(26BB)

Income of corporation established for promoting interest of minority caste [Sec. 10(26BB)]

Any income of a corporation established by the Central Government or State Government for promoting the interests of the members of such minority community as notified by the Central Government from time-to-time, is exempt from tax under section 10(26BB)

89

Sec.10(26BBB)

Income of corporation established for ex-servicemen [Sec.10(26BBB)]

From assessment year 2004-05, any income of a statutory corporation established by Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen (being citizen of India) is exempt from tax under section 10(26BBB).

 

90

Sec. 10(27)

Income of a co-operative society formed for promoting the interests of the members of Scheduled Castes or Scheduled Tribes [Sec. 10(27)]

Any income of a co-operative society formed for promoting the interests of the members of Scheduled Castes or Scheduled Tribes or both [as given in section 10(26B)] is exempt from tax. Exemption is available only if the membership of the co-operative society consists of only other co-operative societies formed for similar purposes and the finances of the society are provided by the Government and such other societies [Section 10(27)].

91

Sec. 10(29A)

Income of coffee board, rubber board, etc. [Sec. 10(29A)]

Any income of Coffee Board, Rubber Board, Tea Board, Tobacco Board, Marine Products Export Development Authority, Agricultural and Processed Food Products Export Development Authority, Spices Board and Coir Board, is exempt from tax under section 10(29A).

92

Sec. 10(30)

Subsidy from the Tea Board [Sec. 10(30)]

In the case of a taxpayer, who carries on business of growing and manufacturing tea in India, the amount of any subsidy received from or through the Tea Board under the notified scheme for

 

93

Sec. 10(32)

Income of minor [Sec. 10(32)]

Under section 64(1A) income of a minor child is clubbed along with the income of his/her parent, subject to certain conditions.. If the income of an individual includes any income of his/her minor child, then such individual can claim exemption (in respect of each minor child) of lower of following amount:

(a)       Rs. 1,500 per minor child; or

(b)       Amount of income of each minor child (which is clubbed)

94

Sec. 10(33)

Capital gains on transfer of US 64 [Sec. 10(33)]

As per section 10(33), long-term or short-term capital gains arising on transfer of units of Unit Scheme, 1964 (US 64) are exempt from tax if the transfer of such asset takes place on or after 1/04/2002.

95

Sec. 10(34)/(35)

Dividends and interest on units [Sec. 10(34)/(35)]

Following incomes are not chargeable to tax from the assessment year 2004-05:

 

96

Sec. 10(34A)

Income of a shareholder on account of buy back of shares by the company [Sec. 10(34A)]

Any income arising to an assessee, being a shareholder, on account of buy back of shares (not being listed on a recognised stock exchange) by the company as referred to in section 115QA is exempt from tax under section 10(34A). This exemption is available only in those cases where additional income-tax is payable on distributed income under section 115QA by the company opting for buy back of such shares

97

Sec. 10(35A)

Income of an investor received from a securitisation trust [Sec. 10(35A)]

Any distributed income referred to in section 115TA received from a securitisation trust by any person being an investor of the said trust is exempt from tax under section 10(35A).

 

Note: The exemption shall not be available from 1st June 2016.

98

Sec. 10(37)

Capital gains in case of compulsory acquisition of urban agricultural land [Section 10(37)]

An individual or Hindu Undivided Family (HUF) can claim exemption in respect of capital gain arising on transfer by way of compulsory acquisition of agricultural land situated in an urban area providedcompensation is received on or after April 1, 2004. This exemption is available if the land was used by the taxpayer (or by his parents in the case of an individual) for agricultural purpose for a period of 2 years immediately preceding the date of its transfer.

99

Sec. 10(38)

Long-term capital gains on transfer of equity shares or units of an equity oriented mutual fund or a unit of a business trust covered by securities transaction tax [Section 10(38)]

Long-term capital gains arising on transfer of securities are not chargeable to tax in the hands of any person, if following conditions are satisfied :

 

100

Sec. 10(39)

Income from international sporting event [Section 10(39)]

From the assessment year 2006-07, any specified income of notified person, arising from an international sporting event held in India is exempt from tax, if the event is approved by the international body and is notified by the Central Government and has participation by more than two countries.

101

Sec. 10(40)

Grants received by specified subsidiary company [Section 10(40)]

Income of any subsidiary company by way of grant or otherwise received from its Indian holding company which is engaged in the business of generation/ transmission/distribution of power is exempt, if such receipt is for settlement of dues in connection with reconstruction or revival of an existing business of power generation. The exemption is available, if the reconstruction or revival is by way of transfer of business to the Indian company notified under section 80 IA(4)(v)(a).

 

Under section 10(41), any capital gain arising in the above case is not chargeable to tax, if the transfer has taken place before April 1, 2006.

102

Sec. 10(42)

Income of certain non-profit body or authority [Section 10(42)]

Any specified income of non-profit body/authority notified by the Central Government and established, constituted or appointed under a multilateral treaty agreement or convention to which Central Government is a signatory is exempt from tax under section 10(42).

103

Sec. 10(43)

Loan in the case of reverse mortgage [Section 10(43)]

Any amount received by an individual as a loan (either in lump sum or in instalments) in a transaction of reverse mortgage referred to in section 47(xvi), is not chargeable to tax.

104

Sec. 10(44)

Income of New Pension System Trust [Section 10(44)]

With effect from assessment year 2009-10, any income received by any person for, or on behalf of the New Pension System Trust established on 27-2-2008 under the provisions of the Indian Trust Act, 1882 will be exempt from tax

105

Sec. 10(45)

Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC [Section 10(45)]

As per section 10(45), any allowance or perquisite, as may be notified by the Central Government in the Official Gazette in this behalf, paid to the Chairman or a retired Chairman or any other member or retired member of the Union Public Service Commission is exempt from tax

106

Sec. 10(46)

Exemption of specified income of notified body/ authority / trust / board / commission [Section10(46)]

Under section 10(46), any specified income arising to any notified body /authority /Board /Trust /Commission (by whatever name called) which has been established or constituted by or under a Central, State or Provincial Act, or has been constituted by the Government or a State 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 and is notified by the Central Government in the Official Gazette for the purposes of this clause is exempt from tax

107

Sec. 10(47)

Any income of a notified infrastructure debt fund set-up in accordance with prescribed guidelines [Section 10(47)]

As per section 10(47), any income of a notified infrastructure debt fund set-up in accordance with the guidelines prescribed in Rule 2F of the Income-tax Rules is exempt from tax.

108

Sec. 10(48)

Income received by certain foreign companies in Indian currency for import of crude oil etc. [Section 10(48)]

Any income received in India in Indian currency by a foreign company on account of sale of crude oil, any other notified goods or rendering of notified services to any person in India is exempt from tax provided-

 

109

Sec. 10(48A)

Any income of a foreign company on account of storage and sale of crude oil [Section10(48A)]

Any income arising to a foreign company through storage of crude oil in a facility in India and sale there from to any person resident in India is exempt from tax provided that-

 

110

Sec. 10(49)

Tax exemption to National Financial Holdings Company Limited [Section 10(49)]

As per section 10(49), any income of the National Financial Holdings Company Limited, being a company set-up by the Central Government, of any year relevant to any assessment year commencing on or before the 1st day of April, 2014 is exempt from tax.

111

Sec. 10(50)

Income subject to equalisation levy [Section 10(50)]

Any income arising from specified services which is chargeable to equalisation levy is exempt from tax.

112

 

Other important exemptions

Apart from above discussed exemption of section 10 following is the list of other important exemptions:

 

       Section 10A provides for exemption in respect of income of newly established undertakings in free trade zone or electronic hardware technology park or electronic software technology park.

 

       Section 10AA provides for exemption in respect of income of newly established units in Special Economic Zones.

 

       Section 11 and 12 provide exemption in respect of income of a public charitable or religious trust.

 

       Section 13A provides exemption in respect of income of a political party.

 

       Section 13B provides exemption in respect of income of an electoral trust

 

 

 
 
 
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