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Introduction
Section 10 contains numerous clauses subject to amendments, exempting various kinds of income from inclusion for purposes of tax. These exemptions stem from social, economic, political, international and other considerations and the contents and scope of the exemptions change from time to time.
Introduction
Section 10 : Any income of any persons falling within any of the clauses of section 10 shall not be included in the total income. Broadly, Section 10 provides exemptions to various categories of persons and to various types of income such as :
Introduction
a) certain incomes of non-residents and noncitizens (Remuneration or fees, interest on notified securities) b) certain incomes of salaried employees (pension, gratuity, HRA, LTC, VRS etc.) c) income from certain specific securities, bonds, certificates etc. (such as Govt. Relief Bonds, PPF Interest) d) Income of certain type of notified bodies, funds and institution
Introduction
e) Subsidies to promote business f) Certain income for social, political reasons (such as agricultural income) g) Avoidence of Double Taxation (Share of profit from partnership firm & amt. received from HUF)
Section-10(1)
Agricultural Income is exempt from tax if it comes within the definition of agricultural income as given in Section 2(1A)
Any sum received by an individual as a member of a HUF, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family.
Section 10(2A)
Share of Profit from the Partnership Firm
In the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm. (upto A.Y. 92-93 it is taxable)
Section 10(10D)
Amount paid on Life Insurance Policies
Any sum received on life insurance policies (including bonus) is exempt. Exclusions : a. any sum received u/s. 80DD(3) b. any sum received under a Keyman Insurance Policy c. any sum received under an insurance policy (issued after 31.03.2003) in respect of which the premium paid in any year during the term of policy, exceeds 20% of the actual sum assured However, sum received under such policy on the death of a person shall continue to be exempt Actual sum assured does not include any premiums agreed to be returned or any benefits by way of bonus
Section 10(33)
Capital Gain on Transfer of US 64
Any income arising from the transfer of a capital asset being a unit of US 64and where the transfer of such assets takes place on or after 1.04.2002, shall be exempt from tax. This exemption is applicable whether US 64 Unit is long term capital asset or short term capital asset.
Section 10(34)
Income from Dividends referred in Sec. 115-O
Any income by way of dividends received from Domestic Company. As per Section 2(22A), Domestic Company means an Indian Company, or any other company which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment, within India, of the dividends (including dividends on preference shares) payable out of such income.
Section 10(37)
Income from transfer of Agricultural Land
Income from transfer of Agricultural Land is exempt if following conditions are fulfilled : a. such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of Section 2
(land within Municipality, cantonment board having more than 10000 population, within 8 kms from local limits or municipality are not covered)
Such income has arisen form the compensation or consideration for such transfer received by such assessee on or after the 01.04.2004
Section 10(10C)
Amount received at the time of VRS
Amount received (Compensation) at the time of voluntary retirement or separation is exempt from tax if the following conditions are satisfied : Compensation is received at the time retirement or termination. Compensation is received by an employee of the specified undertakings. Compensation is received in accordance with the scheme of voluntary retirement/separation which is framed in accordance with prescribed guidelines. Maximum amount of exemption is Rs. 5,00,000/-.
(a)
(b)
(c)
(d)