Tax Free Income in India section 10 : You must have seen that TDS is already deducted on the income you earn or you pay tax on it yourself.
But there are some income on which you do not have to pay any tax at all and these incomes are called tax free income .
Whatever is tax free income, they are mentioned in section 10 of the Income Tax Act. In today’s article (tax free income in India section 10), we will talk about such income, on which you will not have to pay any tax.
Agriculture income:
Income from agriculture was exempted from tax under the Income Tax Act. The reason for making agricultural income tax free is that it has been written in the Constitution of India that the government has no power to tax the income from agriculture.
Also Read: What is TDS and why is it deducted?
Income from agriculture includes the income of the farmer as well as the income of the landlord on rent.
Agriculture income is tax free but it has to be reported in income tax return. Because on income from agriculture your tax calculus changes. But if the income from agriculture is less than Rs 5000 then there will be no difference in your tax calculation.
Income received by family member from hindu undivided family (HUF) –
HUF is considered as a separate person, so if HUF has any income, then tax is paid by HUF only. If any amount is given to the family member, it is tax free in his hands.
But the income given to the family member should be either from the family income or from any undivided property of the family.
Part to be given to Partners from Partnership Firm –
The taxation of the partnership firm and the partner of the firm is different. Hence the income of the partnership firm is taxable in the hands of the partnership firm.
When their share is given to the partner from the firm’s income, it is tax free in the hands of the partner, as it has already been taxed by the firm.
Income of interest on saving bank account –
The interest received on the savings account opened in the bank or post office is also your tax free income. But it is just Rs. It is tax free up to the limit of 10000 only. If you get more interest than this, then more than 10000 interest will be taxable.
But TDS is not deducted on interest received on saving bank account even if it is more than 10,000.
Compensation received due to natural disaster
If a person has received any compensation due to natural calamity, then it will be completely tax free. But this compensation has to be got from Central or State Government or Local Authority.
If the person has received deduction in any other section of the Income Tax Act of the compensation received, he cannot claim it in this section.
Amount received from Sukanya Samriddhi Account –
If any amount is received from the account opened in Sukanya Samriddhi Yojana, then it will also be tax free income.
Interest received from this account will also be completely tax free.
Educational Scholarships – education scholarships
If any student receives any scholarship in relation to education, then it will also be completely tax free income.
Income of a person from sikkim
If a person who is a resident of Sikkim, his income or dividend earned from any source in Sikkim or the interest of securities interest is completely tax free.
But it will not be exempt from tax if a woman of Sikkim marries a person outside Sikkim after 1 April 2008.
Lump sum pension – commuted pension
If a person is an employee of Central or State Government or Local Authority or Statutory Corporation (LIC), then a lump sum pension received by that employee will be tax free.
But the amount of monthly pension received by these employees will be taxable and will be taxable in salary head.
Amount received from life insurance policy and public provident fund
The amount received on maturity of the life insurance policy will be completely tax free, but subject to the fulfillment of certain conditions.
The amount of bonus will also be included in the amount received. Similarly, the amount received from pf is also completely tax free.
Gift income –
If a gift is received from a person, whether it is cash or an item will be tax free, if the gift amount does not exceed 50 thousand. But in some cases, the gifts received are completely tax free, even if it is more than 50 thousand.
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