The Government of India provides some exemptions for the reduction of the tax burden of the assessee. Section 10 of the Income Tax Act deals with those exemption provisions and the terms and conditions on which one can avail a tax exemption.
The present article shall discuss the Exemptions under Section 10 of the Income Tax Act.
During the calculation of the tax liability of an individual, there are certain income sources that don’t form a part of the total income. Section 10 of the Income Tax Act 19611 includes all those exemptions that an assessee can get while paying income tax.
There are various exemptions u/s 10 of the Income Tax Act. The major exceptions are discussed below-
However, there are a few exceptions that are included inSection 10 (13A) Rule 2A. The exemption is allowed for the least of the following amounts:
Section 10 (5), orleave travel allowance exemption, is applicable for individual assessees. The LTA exemption is applicable only to the domestic travel expenses, such as airfare, train or bus fare, incurred by the employee.
Other expenses, such as transportation within the destination, sightseeing, hotels, and food, are not covered. Additionally, the exemption is limited to LTA provided in your CTC by the employer.
For instance, if an employee is given an LTA of Rs 30,000 and incurs travel expenses of Rs 20,000, only the amount actually spent on travel would be exempt from taxes, and the remaining Rs 10,000 would be included as taxable income.
Section | Exemption |
Section 10(1) | Income earned through agricultural means |
Section 10(2) | Any amount received by an individual through a coparcener from a HUF |
Section 10(2A) | Income received by the firm’s partner, as shared between them |
Section 10(4)(i) | Any interest that has been paid to a person who is not a resident Indian |
Section 10(4)(ii) | Any interest that has been paid to the account of a person who is not a resident Indian |
Section 10(4B) | Any interest that has been paid to a person who is not a resident Indian but of Indian origin |
Section 10(5) | Concession on travel given to an employee who is also a citizen of India |
Section 10(6) | Any income earned or received by a non-Indian citizen |
Section 10(6A), (6B), (6BB), (6C) | Government tax paid on the income of a foreign firm |
Section 10(7) | Allowances received by government employees stationed abroad |
Section 10(8) | Income earned by foreign employees in India under the Cooperative Technical Assistance Program |
Section 10(8A) | Income earned by a consultant |
Sec 10(8B) | Income earned by the staff of a consultant or employees |
Sec 10(9) | Income which is earned by any family member of a foreign employee in India as per the Cooperative Technical Assistance Program |
Section 10(10) | Gratuity |
Section 10(10A) | The commuted value of the pension being earned by an individual |
Section 10(10AA) | Any amount earned via encashment of leave at the time of retirement |
Section 10(10B) | Compensation paid to workers due to relocation |
Section 10(10BB) | Any remittance received as per the Bhopal Gas Leak Disaster Act 1985 |
Section 10(10BC) | Any compensation received in the event of a disaster |
Section 10(10C) | Compensation in lieu of retirement from a PBC or any other firm |
Section 10(10CC) | Any income received through taxation on perquisites |
Section 10(10D) | Any amount acquired through a Life insurance policy |
Sec 10(11) | Receipt of payment via the Statutory Provident Fund |
Section 10(12) | Receipt of payment via a recognised or authorised Fund |
Section 10(13) | Any payment received through a Superannuation Fund |
Section 10(13A) | House Rent Allowance |
Section 10(14) | Allowances utilised to meet business expenses |
Section 10(15) | Income received in the form of interest |
Section 10(15A) | Income received by an Indian firm by way of the lease of an aircraft from a foreign firm or government |
Section 10(16) | Income in the form of a scholarship |
Section 10(17) | Allowances granted to MLCs, MLAs or MPs |
Section 10(17A) | Income which is received in the form of a government award |
Section 10(18) | Income is being received in the form of pensions by winners of awards for heroism. |
Section 10(19) | Income is received by family members of the armed forces in the form of a pension. |
Sec- 10(19A) | Income that is received from a single palace of an ex ruler |
Sec- 10(20) | Income that is received by a localised body or authority |
Section 10(21) | Income received by an association engaged with scientific research |
Section 10(22B) | Income earned by a news or broadcasting agency |
Section 10(23A) | Income earned by certain Professional Institutes |
Section 10(23AA) | Income acquired through Regimental Fund |
Section 10(23AAA) | Income acquired through an employee welfare fund |
Section 10(23MB) | Insurance pension fund income |
Section 10(23B) | Income earned by village industry development institutions |
Section 10(23BB) | Income earned by state-level Khadi and Village Industries Board |
Section 10(23BBA) | Income earned by regulatory bodies of institutions affiliated with religion and charity |
Section 10(23BBB) | Income received by the European Economic Community |
Section 10(23BBC) | Income received through SAARC-funded regional projects |
Section 10(23BBE) | Income received by the IRDA |
Section 10(23BBH) | Income received through Prasar Bharti |
Section 10(23C) | Income received by any individual through certain specified funds |
Section 10(23D) | Income earned via Mutual Funds |
Section 10(23DA)j | Income earned via a Securitisation Trust |
Section 10(23EA) | Income earned through an IPF |
Section 10(23EB) | Income received by the Credit Guarantee Trust for Small Industries |
Section 10(23ED) | Income exemption of IPF |
Section 10(23DFB) | Income exemption of specified income received by Venture Capital Firms, Funds or Businesses |
Section 10(24) | Income earned by authorised trade unions |
Section 10(25) | Income earned via provident funds and superannuation funds |
Section 10(25A) | Income earned via Employee’s State Insurance Fund |
Section 10(26), 10(26A) | Income earned by Schedule Tribe Members |
Section 10(26AAN) | Income earned by an individual of Sikkimese origin |
Section 10(26AAB) | Marketing regulation with regard to agricultural produce |
Section 10(26B) | Income earned by corporations was established for uplifting the backward tribes and classes |
Section 10(26BB) | Income earned by corporations established for protecting the interests of Minority interests |
Sec – 10(26BBB) | Income earned by corporations established for former servicemen |
Section 10(27) | Income earned by cooperative societies established for the protection of scheduled castes and tribe’s interests |
Section 10(29A) | Income received by Community Boards |
Section 10(30) | Income earned in the form of subsidies through the Tea Board |
Section 10(31) | Income earned in the form of subsidies through the concerned Board |
Section 10(32) | Income earned by a child under Section 64 of the Income Tax Act. |
Section 10(33) | Income earned through Unit Trust of India capital asset transfer |
Section 10(34) | Income earned in the form of dividends through an Indian firm |
Section 10(34A) | Income earned by a shareholder by way of buyback of unlisted companies |
Section 10(35) | Income received through the sale or transfer of Unit Trust of India units, as well as other mutual funds |
Section 10(35A) | Income from a securitisation trust that is exempt |
Section 10(36) | Income received on the sale of shares under specific conditions |
Section 10(37) | Any capital gains made on the mandatory acquirement of land in relation to urban agriculture |
Section 10(38) | Any long-term capital gains made from share and security transfers that fall under the purview of Security Transaction Tax |
Section 10(39) | Any income being received from any international event or function relating to sports. |
Section 10(40) | Acquisition of Income in the form of a grant from a company deemed to be a parent company’s subsidiary |
Section 10(41) | Any income which has been received on any asset transfer of a company or project that conducts power distribution, generation and transmission |
Section 10(42) | Any income earned by any authority that has been established by more than one country |
Section 10(43) | Any income in relation to the reversal of the mortgage |
Section 10(44) | Income generated through the NPS Trust |
Sec 10(45) | Any allowance or perks granted to any member or chairman of the UPSC |
Sec 10(46) | Any income coming under the category of ‘specified income’ with regard to specific authoritative bodies |
Section 10(47) | Any income being exempted under the category of infrastructure debt fund |
Section 10(48) | Any income earned by a foreign company or firm because of crude oil sales within India. |
Sec 10(49) | Any income earned by the National Finance Holdings Company, i.e. NFHC |
The above-mentioned exemptions can surely reduce the tax burden of the assessee, which shall, in turn, encourage them for the timely filing of their income tax returns and help in avoiding any penalties consequential to the late or non-filing of the same.
What Is A Section Of The Income Tax Act?
During the calculation of the tax liability of an individual, there are certain income sources that don’t form a part of the total income. Section 10 of the Income Tax Act 1961 includes all those exemptions that a taxpayer can get while paying income tax.
What Is The Benefit Of Claiming Exemption Under Section 10 Of The Income Tax Act?
This exemption helps in the reduction of the tax liability of the assessee, which is one of the most important benefits of claiming such an exemption.
On What Amount Is The HRA Exemption Allowed?
The exemption is allowed for the least of the following amounts: • Actual HRA received • 50% of [basic salary + DA] for those living in Delhi, Mumbai, Chennai, Kolkata or • 40% of [basic salary + DA] for those living in other cities • Actual rent paid (-) 10% of basic salary + DA
What Is Section 10(23C) Of the Act?
This section deals with educational or medical institutions whose aggregate annual receipts don’t exceed Rs.5 crore and is eligible for exemption under this section.
What Is The Manner Of Claiming The Exemption Under Section 10 Of The Income Tax Act?
The claim of exemption under Section 10 can be made by filing an income tax return.