Exemptions under Section 10 of the Income Tax Act - Enterslice (2024)

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.

SectionExemption
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)jIncome 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.

Exemptions under Section 10 of the Income Tax Act - Enterslice (2024)

FAQs

What is Section 10A of the Income Tax Act? ›

Section 10A of the Income Tax Act is a significant provision that incentivizes businesses to invest in SEZs and promote industrial growth and development. The deduction of 100% of profits and gains for the first five consecutive assessment years provides a substantial tax benefit to newly established undertakings.

What counts as a tax exemption? ›

Tax-exempt refers to income or transactions that are free from tax at the federal, state, or local level. The reporting of tax-free items may be on a taxpayer's individual or business tax return and shown for informational purposes only. The tax-exempt article is not part of any tax calculations.

What is Section 10 34A of Income Tax Act? ›

By section 10(34A), any income in the hands of shareholders on which tax is to be paid under section 115QA is exempt. Tax on Buy-Back is to be paid within 14 days from the date of payment of any amount to the shareholders.

What is the second proviso to section 10-11? ›

1) For the purpose of the first and second provisos to clauses (11) and (12) of section 10, income by way of interest accrued during the previous year which is not exempt from inclusion in the total income of a person under the said clauses (hereinafter in this rule referred to as the taxable interest) shall be ...

What is the applicability of Section 10a? ›

(2)[ This section applies to any undertaking which fulfills all the following conditions, namely:- (i)it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year- (a)commencing on or after the 1st day of April, 1981, in any free trade ...

What is Section 10 10 D of Income Tax Act? ›

What is Section 10 (10D) of the Income Tax Act? Individuals can claim tax exemption on the sum assured and accrued bonus (if any) received through their life insurance policy claim under Section 10 (10D) of the Income Tax Act of 1961. (maturity or death benefit).

What are the two types of exemptions? ›

There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax.

What are the IRS exemptions? ›

What are exemptions? A dollar amount that can be deducted from a taxpayer's total income, thereby reducing their taxable income.

How many exemptions to claim? ›

A single filer with no children should claim a maximum of 1 allowance, while a married couple with one source of income should file a joint return with 2 allowances. You can also claim your children as dependents if you support them financially and they're not past the age of 19.

What is Section 10 23F of Income Tax Act? ›

a. Sec 10(23F) – any income by way of dividends or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking.

What is Section 10 1 )( H of the Income Tax Act? ›

Section 10(1)(h) of the Act provides that an amount of interest which is received by or accrues to a person that is not a resident is exempt from normal tax in South Africa, unless (i) the person is a natural person who was physically present in South Africa for a period exceeding 183 days in aggregate during the 12 ...

What is Section 34a of Income Tax Act? ›

section 34a restriction on unabsorbed depreciation and unabsorbed investment allowance for limited period in case of certain domestic companies income tax act 1961 2021.

What is the 80DD rule? ›

Section 80DD can be claimed by both HUFs and individuals who are caring for a disabled dependent. The deductions are applicable on expenses related to caring for a disabled dependent. The deduction amount will also cover insurance premium paid to specific insurers for the purpose of maintenance of a disabled dependent.

What is 11 2 of the Income Tax Act? ›

Section 11(2) of Income Tax Act

Now, institutions must utilise accumulations beyond 15% within the next 5 years. However, this amount will not fall under the institution's total income in the case of the following: Institutions invest the funds in modes specified under Section 11(5). In case they submit Form No.

What is Rule 11 UA income tax? ›

Rule 11UA of the Income Tax prescribes the valuation methodology for determining the FMV of various types of assets (including unquoted equity shares), not only for the purposes of the angel tax provision but also for other anti-abuse provisions involving transfer of assets without consideration or at a value less than ...

What is Section 10A of the Securities Exchange Act? ›

Section 10A of the U.S. Securities Exchange Act of 1934 requires that an auditor report to the Securities and Exchange Commission (SEC) when, during the course of a financial audit, an auditor detects likely illegal acts that have a material impact on the financial statements and appropriate remedial action is not ...

What does 10AA mean? ›

Section 10AA is a provision under the Income Tax Act which allows taxpayers to take deductions for businesses which are established in Special Economic Zones (SEZ).

What is the standard deduction and how does it work? ›

The standard deduction is a specific dollar amount that reduces the amount of taxable income. The standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and/or blindness. In general, the IRS adjusts the standard deduction each year for inflation.

References

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