NON TAXABLE INCOME

OR

INCOME EXEMPT FROM TAX





Introduction
Exempted income is that income on which
income tax is not chargeable. Exempted
incomes are not even included in total income
Exempted incomes can be classified in the
following categories
a) For all assessee;
b) For employees
c) For institutions






(a) Exemption for all Assessees
(1)Agricultural Income[Sec.10(1)] is exempt from tax if it
comes within the definition of agricultural income as
given in Section 2(1A)
(2)Sums received from H.U.F. [Sec.10(2)] Any sum
received by an individual as a member of a HUF out of
income of the family is exempt from tax
(3) Share of income of a partner from the firm
[Sec.10(2)]A partner of a firm will be exempt from tax on
his share of income in the firm as per the profit sharing
ratio mentioned in the partnership deed.
(4) Payment under Bhopal Gas leak Disaster Act
1985[Sec.10(10BB)] Such payments received by a
person will be exempt from tax but any payment in this
connection for which deduction has already been
allowed will not be exempted

(a) Exemption for all Assessees
(5)Compensation for disaster[Sec.10(10BC)] Any
amount received or receivable from the Central
Government or State Government or a local authority
by an individual or his legal heir by way of
compensation on account of any disaster shall eb
exempted
(6) Life Insurance Money[Sec.10(10D)]Any sum received
under a life insurance policy including bonus shall be
exempt
(7) Interest etc. of different types[Sec.10(15)] The full
exemption from tax is allowed interest as Sec.10(15)
(8) Educational Scholership[Sec.10(16)]
(9) Allowances of M.Ps, M.L.As & M.L.Cs.[Sec.10(17)]



(a) Exemption for all Assessees
(10) Awards: Any payment made whether in cash or in
kind[Sec.10(17A)]
(11) Pension of gallantry awardees like Param Vir
Chakra or Mahavir Chakra or Vir chakra
(12) Family pension of a member of armed forces
[Sec.10(19)]
(13)Annual value of one palace of Rulers of Indian
States[Sec.10(19A)]
(14) Income of Scheduled Tribes residing in the states
of Arunachal Pradesh, Manipur, Mizoram,
Nagaland, Tripura & Sikkim or Laddakh region of
the State J .&K are fully exempt[Sec.10(26)]



(a) Exemption for all Assessees
(15) Certain income of Sikkimese as per
Sec.10(26AAA)
(16) Any income of an agricultural market committee
or board [Sec.10(26AAB)]
(17) Subsidy from Tea Board[Sec.10(30)]
(18) Subsidy received by planters [Sec.10(31)]
(19) Income of Minor Child up to Rs. 1500/- each
[Sec.10(32)]
(20) Income from units of UnitsScheme,1964
[Sec.10(33)]





(a) Exemption for all Assessees
(21)Dividend from domestic company [Sec.10(34)]
(22)Income from Units [Sec.10(35)]
(23)Income from Equity Shares held for a period of 12
months [Sec.10(36)]
(24)Capital Gains on transfer of Agricultural land
[Sec.10(37)]
(25)Long Term Capital Gains on transfer of an equity
share or a unit [Sec.10(38)]
(26)Income from international sporting events
[Sec.10(39)]



(a) Exemption for all Assessees
(27)Income from subsidiary company [Sec.10(40)]
(28)Specified Income of a body or authority
[Sec.10(42)]
(29)Any amount received by an individual as a loan in
a transaction of reverse mortgage [Sec.10(43)]
(29A) Allowances or perquisite paid to the Chairman
Or Member of UPSC[Sec.10(45)]
(30)Income from newly established industrial
undertaking in free trade zone, etc. [Sec.10A]
(31)Income from newly established Units in Special
Economic Zones [Sec.10AA]

(b) Exemption for Employees
(1) Allowance or Perquisite outside India [Sec.10(7)]
(2) Leave Travel Concession to an Employee [Sec.10(5)]
(3) Death cum retirement gratuity [Sec.10(10)]
(4) Commutation of pension [Sec.10(10A)]
(5) Leave Salary or Encashment of Earned Leave [Sec.10(10AA)]
(6) Compensation on retrenchment[Sec.10(10B)]
(7) Compensation on voluntary retirement [Sec.10(10C)]
(8) Tax paid by Employer on the Value of Perquisite
[Sec.10(10CC)]




(b) Exemption for Employees

(9) Payment from Statutory Provident Fund
[Sec.10(11)]
(10) Payment from Recognized Provident Fund
[Sec.10(12)]
(11) Payment from Approved Superannuation fund
[Sec.10(13)]
(12) House Rent Allowance [Sec.10(13A)]
(13) Special Allowance for meeting certain expenditure
[Sec.10(14)]






(c) Exemption for Institution
(1) Income of a local authority[Sec.10(20)]
(2) Income of Research Association[Sec.10(21)]
(3) Income of News Agency[Sec.10(22B)]
(4) Income of Professional Institute [Sec.10(23A)]
(5) Income of Regimental Fund or Non-public Fund
[Sec.10(23AA)]
(6) Income of a Fund for Welfare of Employee or their
dependants [Sec.10(23AAA)]
(7) Income of Pension Fund Set up by LIC of India or
other insurer [Sec.10(23AAB)]

(c) Exemption for Institution
(8) Income of Khadi & Village Industries [Sec.10(23B)]
(9) Income of Khadi & Village Board [Sec.10(23BB)]
(10)Income of statutory authority for the administration of
public Religious or Charitable Trusts [Sec.10(23BBA)]
(11)Income of European Economic Community
[Sec.10(23BBB)]
(12)Income of SAARC Fund [Sec.10(23BBC)]
(13)Any income of the Insurance Regulatory and
Development Authority [Sec.10(23BBE)]



(c) Exemption for Institution
(14) Any Income of the Central Electricity Regulatory
Commission [Sec.10(23BBG)]
(15) Income of Specified Charitable Funds [Sec.10(23C)]
(16) Income of Mutual Funds [Sec.10(23D)]
(17) Income of Investor Protection Fund from recognized
stock exchange [Sec.10(23EA)]
(18) Income of Investor Protection Fund from commodity
exchange [Sec.10(23EC)]
(19) Income of Venture Capital Fund or Venture Capital
Company (w.e.f A.Y.2001-02) [Sec.10(23FB)]




(c) Exemption for Institution
(20) Income of Registered Trade Unions[Sec.10(24)]
(21) Income of Provident Fund, etc.[Sec.10(25)]
(22) Income of Employees State Insurance Fund
[Sec.10(25A)]
(23) Income of a body for promoting interest of Scheduled
Caste or Scheduled Tribes[Sec.10(26B)]
(24) Income of Corporation set up for the benefit of Minority
Community[Sec.10(26BB)]
(25) Income of Corporation established by Central govt. Or
State Govt. [Sec.10(26BBB)]



(c) Exemption for Institution
(26) Income of Co-operative Society formed for Promoting
the Interests of S/C or S/T [Sec.10(27)]
(27) Income of Boards (The Coffee Board, The Rubber
Board, The Tea Board, The Tobacco Board, etc.
[Sec.10(29A)]
(28) Income of New Pension System Trust [Sec.10(44)]
(28A) Income of a body or authority or Board or Trust or
Commission [Sec.10(46)]
(28B) Income of Infrastructure Debt Fund [Sec.10(47)]
(29) Income of Political Party[Sec.13A]
(30) Income of Electoral Trust[Sec.13B]