10/06/2014

Tax Free Income - Sections, Nature and Rules

Summary Tax Free Income, Rules of Tax Free Income
CHARTS & TABLES UNDER INCOME-TAX ACT
TAX-FREE INCOMES
Section
Nature of exemption
Who are entitled
Relevant Rule
(1)
(2)
(3)
(4)
10(1)
Agricultural income
Any assessee
7, 7A, 7B, 8
10(2)
Amount received out of family income, or in case of impartibly estate, amount received out of income of family estate
Individual as member of HUF
10(2A)
Partner's share in total income of firm
Partner of a firm
10(4)(i)
Interest on securities or bonds notified before 1-6-2002 by the Central Government including premium on redemption of such bonds
Non-resident
10(4)(ii)
Interest received on Non-resident (External) Account
Person resident outside India (as defined in FEMA) and person who has been permitted to maintain said account by RBI
10(4B)
Interest on notified savings certificates issued before 1-6-2002 by the Central Government and subscribed to in convertible foreign exchange
Individual (Indian citizen or person of Indian origin, who is a non-resident)
10(5)
Leave travel concession or assistance (subject to prescribed conditions and limited to amount actually spent)
Individual - Salaried employee
2B
10(6)(ii)
Remuneration received by specified diplomats and their staff
Individual (non-citizen of India)
10(6)(vi)
Remuneration received as employee of foreign enterprise for services rendered during stay in India (subject to certain conditions)
Individual - Salaried employee (non-citizen of India)
10(6)(viii)
Remuneration received for services rendered in connection with employment on a foreign ship (subject to certain limits)
Individual - Salaried employee (non-resident, non-citizen of India)
10(6)(xi)
Remuneration received as employee of foreign Government in connection with his training in Government offices/statutory undertakings, etc.
Individual - Salaried employee (foreign citizen)
10(6A)
Tax paid by Government or Indian concern on royalty/fees for technical services from Government or Indian concern under agreement made before 1-6-2002 which either relates to a matter included in the industrial policy of the Government and is in accordance with that policy or is approved by Central Government
Foreign company
10(6B)
Tax paid by Government or Indian concern under terms of agreement entered into before 1-6-2002 by Central Government with Government of foreign State or international organisation on income derived from Government or Indian concern, other than income by way of salary, royalty or fees for technical services
Non-resident (other than company) or foreign company
10(6BB)
Tax paid by Indian company, engaged in the business of operation of aircraft, who has acquired an aircraft or its engine on lease, under an approved (by Central Government) agreement entered into between 31-3-1997 and 1-4-1999, or after 31-3-2007, on lease rental/income
Government of foreign State or foreign enterprise
10(6C)
Income by way of royalty or fees for technical services rendered in India or abroad in projects connected with security of India pursuant to agreement with Central Government
Notified foreign company
10(7)
Foreign allowances or perquisites paid or allowed by Government to its employees posted abroad
Individual - Salaried employee (Indian citizen)
10(8)
Foreign income and remuneration received from foreign Government for services rendered in connection with any co-operative technical assistance programmes and projects in accordance with agreement entered into by Central Government and foreign Government (subject to certain conditions)
Individual
10(8A)
Foreign income and remuneration received by consultant (agreement relating to his engagement must be approved) out of funds made available to an international organisation (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State
Non-Indian citizen/ Indian citizen who is not ordinarily resident in India/non-resident, engaged by the agency for rendering technical services in India
10(8B)
Foreign income and remuneration received by an employee of the consultant referred to in section 10(8A)
Non-Indian citizen/Indian citizen who is not ordinarily resident in India (contract of service must be approved by the prescribed authority before commencement of service)
10(9)
Income of any member of family of any individual [referred to in section 10(8), 10(8A) or 10(8B)] which accrues or arises outside India and is not deemed to accrue or arise in India and which is subject to tax in that foreign country
Individual
10(10)(i)
Death-cum-retirement gratuity received by Government servants
Individual - Salaried employee
10(10)(ii)
Gratuity received under the Payment of Gratuity Act, 1972 (maximum Rs. 10,00,0001)
Individual - Salaried employee
10(10)(iii)
Any other gratuity received by employee/legal heirs on retirement, termination of services, death, etc., limited to half month's salary for each year of completed service (subject to certain conditions) [maximum limit Rs. 10,00,0002]
Individual - Salaried employee
10(10A)
Payment in commutation of pension received from Government/Private employer (subject to certain limits)/LIC Fund u/s 10(23AAB)
Individual - Salaried employee
10(10AA)
Amounts by way of encashment of unutilised earned leave on retirement limited to 10 months' salary (subject to certain conditions) [maximum limit Rs. 3,00,000 (in case of retirement after 1-4-1998)]
Individual - Salaried employee
10(10B)
Retrenchment compensation [maximum limit under proviso (ii) is Rs. 5,00,000]
Individual - Workman
10(10BB)
Payments made under Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 and any scheme framed thereunder (subject to certain conditions)
Any assessee
10(10BC)
Compensation on account of any disaster received/receivable from Government/local authority (subject to certain conditions)
Individual or his legal heir
10(10C)
Payment received or receivable (not exceeding Rs. 5,00,000) on voluntary retirement in accordance with scheme framed in accordance with prescribed guidelines1
Individual - Employee of a public sector company, any other company, an authority established under a Central, State or Provincial Act, a local authority, co-operative societies, universities, IITs, any State Government, Central Government, notified institution having importance throughout India or in any State or States, or notified institutes of management
2BA
10(10CC)
Tax paid by employer on perquisite (not provided for by way of monetary payment) given to employees
Individual - Salaried employee
10(10D)
Any sum received under a life insurance policy including bonus on such policy but excluding sums received u/s 80DDA(3) and under a Keyman insurance policy1
Any assessee
10(11)
Payment from public provident fund/statutory provident fund
Individual/Hindu undivided family
10(12)
Accumulated balance payable to employee participating in recognised provident fund (subject to certain conditions)
Individual - Salaried employee
10(13)
Payment from approved superannuation fund in specified circumstances and subject to certain limits
Individual
10(13A)
House rent allowance (subject to certain limits)
Individual - Salaried employee
2A
10(14)
Prescribed allowances or benefits
Individual - Salaried employee
2BB
10(15)(i)
Interest, premium on redemption, or other payment on notified securities, bonds, certificates, and deposits, etc. (subject to notified conditions and limits)
All assessees
10(15)(iib)
Interest on notified Capital Investment Bonds notified prior to 1-6-2002
Individual/HUF
10(15)(iic)
Interest on notified Relief Bonds
Individual/HUF
10(15)(iid)
Interest on notified bonds (notified prior to 1-6-2002) purchased in foreign exchange (subject to certain conditions)
Individual - NRI/nominee or survivor of NRI/individual to whom bonds have been gifted by NRI
10(15)(iii)
Interest on securities
Issue Department of Central Bank of Ceylon
10(15)(iiia)
Interest on deposits made with scheduled bank with approval of RBI
Bank incorporated abroad
10(15)(iiib)
Interest payable to Nordic Investment Bank
Nordic Investment Bank
10(15)(iiic)
Interest payable to the European Investment Bank on loan granted by it in pursuance of framework-agreement dated 25-11-1993 for financial corporation between Central Government and that bank
European Investment Bank
10(15)(iv)(a)
Interest received from Government or from local authority on moneys lent to it before 1-6-2001 or debts owed by it before 1-6-2001, from sources outside India
All assessees who have lent money, etc., from sources outside India
10(15)(iv)(b)
Interest received from industrial undertaking in India on moneys lent to it under a loan agreement entered into before 1-6-2001
Approved foreign financial institution
10(15)(iv)(c)
Interest at approved rate received from Indian industrial undertaking on moneys lent or debt incurred before 1-6-2001 in a foreign country in respect of purchase outside India of raw materials, components or capital plant and machinery, subject to certain limits and conditions
All assessees who have lent such money, or in favour of whom such debt has been incurred
10(15)(iv)(d)
Interest received at approved rate from specified financial institutions in India on moneys lent from sources outside India before 1-6-2001
All assessees who have lent such moneys
10(15)(iv)(e)
Interest received at approved rate from other Indian financial institutions or banks on moneys lent for specified purposes from sources outside India before 1-6-2001 under approved loan agreement
All assessees who have lent such moneys
10(15)(iv)(f)
Interest received at approved rate from Indian industrial undertaking on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2001
All assessees who have lent such moneys
10(15)(iv)(fa)
Interest payable by scheduled bank, on deposits in foreign currency when acceptance of such deposits by bank is approved by RBI
Non-resident or individual/ HUF who is not ordinarily resident in India
10(15)(iv)(g)
Interest received at approved rate, from Indian public companies eligible for deduction under section 36(1)(viii) and formed with main object of providing long-term housing finance, on moneys lent in foreign currency from sources outside India under loan agreement approved before 1-6-2003
All assessees who have lent such moneys
10(15)(iv)(h)
Interest received from any public sector company in respect of notified bonds or debentures and subject to certain conditions
All assessees
10(15)(iv)(i)
Interest received from Government on deposits in notified scheme out of moneys due on account of retirement
Individual - Employee of Central Government/State Government/Public sector company
10(15)(v)
Interest on securities held in Reserve Bank's SGL A/c No. SL/DH-048 and Deposits made after 31-3-1994 for benefit of victims of Bhopal Gas Leak Disaster held in such account with RBI or with notified public sector bank
Welfare Commissioner, Bhopal Gas Victims, Bhopal
10(15)(vi)
Interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by Central Government
All assessees
10(15)(vii)
Interest on notified bonds issued by a local authority/State Pooled Finance Entity
All assessees
10(15)(viii)
Interest on deposit made on or after 1-4-2005 in an Offshore Banking Unit referred to in section 2(u) of the Special Economic Zones Act, 2005
Non-resident or person who is not ordinarily resident
10(15A)
Any payment made by an Indian company, engaged in business of operation of aircraft, to acquire an aircraft or an aircraft engine on lease from the Government of a foreign State or a foreign enterprise (person who is non-resident) under approved agreement entered into on or after 1-4-1999 but before 1-4-2007. However, payment made for providing spares, facilities or services in connection with operation of leased aircraft is excluded
Foreign State/Enterprise
10(16)
Educational scholarship
Individual
10(17)(i)
Daily allowance
Individual - Member of Parliament/State Legislature/ Committee thereof
10(17)(ii)
Any allowance received by MP under Members of Parliament (Constituency Allowance) Rules, 1986
Member of Parliament
10(17)(iii)
Any constituency allowance received
Individual - Member of State Legislature
10(17A)(i)
Amount received in pursuance of award (whether in cash or kind) instituted in public interest by Central/State Government or approved award instituted by other body
Any assessee
10(17A)(ii)
Reward (whether in cash or kind) received from Central/State Government for approved purposes in public interest
Any assessee
10(18)
Pension received by an individual who has won specified/notified gallantry awards and family pension received by any family member of such individual
Individual - Central/ State Government employee or his family member
10(19)
Family pension received by the widow, children or nominated heirs of a member of the armed forces (including para military forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances)
Individual (widow, children or nominated heirs of member of armed forces)
2BBA
10(19A)
Notional annual value of any one palace occupied by former ruler
Individual
10(20)
Specified incomes of a local authority1
Local authority1
10(21)
Income of approved research associations subject to certain conditions
Research Association
10(22B)
Income of notified news agency set up in India solely for collection and distribution of news (subject to certain conditions)
News agencies
10(23A)
Income of approved professional bodies other than income from house property, income received for rendering specific services and income by way of interest or dividends (subject to certain conditions)
Professional associations
10(23AA)
Income received on behalf of regimental fund or non-public fund established by armed forces
Regimental fund or non-public fund
10(23AAA)
Income of approved fund established for notified purposes for welfare of member employees or their dependents (subject to certain conditions)
Approved fund
16C
10(23AAB)
Income of fund set up by LIC or any other insurer under an approved pension Scheme (subject to certain conditions)
Fund set up by LIC or any other insurer
10(23B)
Income of institution existing solely for development of khadi or village industries (subject to certain conditions)
Public charitable trust/ registered society
10(23BB)
Income of authority established for development of khadi or village industries
Authority established under State or Provincial Act
10(23BBA)
Income of a body or authority established for administration of public religious or charitable trusts or endowments, etc.
Body/Authority established, constituted or appointed under Central, State or Provincial Act
10(23BBB)
Income of EEC from interest, dividends or capital gains from investment of funds under specified scheme
European Economic Community
10(23BBC)
Income of SAARC Fund for Regional Projects set up by Colombo Declaration issued on 21-12-1991
SAARC Fund for Regional Projects
10(23BBD)
Any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI - Secretariat under the Societies Registration Act, 1860 for a period of 10 assessment years relevant to assessment years beginning on 1-4-2001
Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as ASOSAI - Secretariat
10(23BBE)
Income of Insurance Regulatory and Development Authority (IRDA)
IRDA
10(23BBF)
Income of North-Eastern Development Finance Corporation Limited (subject to certain limits)
North-Eastern Development Finance Corporation Limited
10(23BBG)
Income of Central Electricity Regulatory Commission
Central Electricity Regulatory Commission
10(23BBH)
Income of Prasar Bharati (Broadcasting Corporation of India)
Prasar Bharati (Broadcasting Corporation of India)
10(23C)(i) to (iiia)
Income received by any person on behalf of specified Prime Minister's Funds or National Foundation for Communal Harmony
Any person concerned
10(23C) (iiiab)
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government
University/other educational institution
10(23C)(iiiac)
Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government
Hospital/Nursing Home, etc.
10(23C)(iiiad)
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees
University/other educational institution
2BC
10(23C)(iiiae)
Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts do not exceed one crore rupees
Hospital/Nursing Home, etc.
2BC
10(23C)(iv)/(v)
Income received by any approved charitable fund or institution and approved public religious/charitable trust or institution (subject to certain conditions)
Charitable/Religious trusts and institutions
16CC
10(23C)(vi)
Income of any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiab) and 10(23C)(iiiad) and which is approved by the prescribed authority (subject to certain conditions)
University/other educational institution
2CA/ 16CC
10(23C)(via)
Income of any hospital or other medical treatment institution existing solely for philanthropic purposes and not for purposes of profit, other than those mentioned in section 10(23C)(iiiac) and 10(23C)(iiiae) and which is approved by the prescribed authority (subject to certain conditions)
Hospital/Nursing Home, etc.
2CA/ 16CC
10(23D)1
Income of Mutual Fund registered under SEBI Act, 1992 and notified Mutual Fund set up by public sector bank or public financial institution or authorised by RBI, subject to notified conditions and provisions of Chapter XIIE
Mutual Fund registered under SEBI Act, 1992, and Notified Mutual Fund set up by public sector bank or financial institution or authorised by RBI
10(23EA)
Income, by way of contributions received from recognised stock exchanges and members thereof, of notified Investor Protection Fund set up by recognized stock exchanges in India either jointly or separately (subject to certain conditions)
Investor Protection Fund
10(23EB)
Income of Credit Guarantee Fund Trust for Small Industries created by Government of India and SIDBI
Credit Guarantee Trust Fund
10(23EC)2
Contributions received from commodity exchanges and members thereof (subject to certain conditions)
Notified Investor Protection Funds set up by Commodity Exchanges in India
10(23F)
Dividends or long-term capital gains of approved venture capital fund/venture capital company from investments made before 1-4-1999 by way of equity shares in a venture capital undertaking (subject to certain conditions)
Approved venture capital fund/venture capital company
2D
10(23FA)
Any income by way of dividends (other than dividends referred to in section 115-O), or long-term capital gains of approved venture capital funds and venture capital companies from investments made by way of equity shares in a venture capital undertaking (subject to certain conditions) (exemption is not available in respect of investments made after 31-3-2000)
Approved venture capital funds/venture capital companies
2DA
10(23FB)
Income of a venture capital company or venture capital fund from investment in a venture capital undertaking
Venture capital company/fund3
10(24)
Income of trade union under the heads 'Income from house property' and 'Income from other sources'
Registered trade union/ associations of registered trade unions
10(25)
Interest on securities and capital gains on sale of securities held by provident fund to which Provident Funds Act, 1925 applies/income received by trustees on behalf of recognised provident fund, approved superannuation fund, approved gratuity fund and deposit-linked insurance fund in certain cases
Retirement benefit funds
10(25A)
Income of ESI Fund set up under ESI Act, 1948
Employees' State Insurance Fund
10(26)
Specified income of member of specified Scheduled Tribes residing in specified areas
Individual (member of specified Scheduled Tribe)
10(26AAA)
Income from any source in the State of Sikkim or income by way of dividend or interest on securities (subject to certain conditions)
Sikkimese individual (other than Sikkimese woman who, after 31-3-2008, marries non-Sikkimese)
10(26AAB)
Any income of agricultural produce market committee/board constituted under any law for time being in force for purpose of regulating marketing of agricultural produce
Agricultural produce market committee/board
10(26B)
Income of Central/State Corporation or Government financed body, institution or association established for promoting interests of members of Scheduled Castes, Scheduled Tribes and/or Backward Classes
Government corporation/body, institution or association wholly financed by Government
10(26BB)
Income of corporation established by Government for promoting interests of members of minority community
Government corporation
10(26BBB)
Income of corporation established by Central, State or Provincial Act for welfare and economic upliftment of Indian Ex-servicemen who are citizens of India
Government corporation
10(27)
Income of certain co-operative societies formed for promoting the interests of Scheduled Castes/Scheduled Tribes members
Co-operative societies
10(29A)
Income accruing or arising to the Coffee Board, the Rubber Board, the Tea Board, the Tobacco Board, the Marine Products Export Development Authority, the Agricultural and Processed Food Products Export Development Authority, the Spices Board and the Coir Board.
Respective Boards and Authorities
10(30)
Subsidy received from or through Tea Board under notified scheme for replantation/replacement of tea bushes, etc. (subject to certain conditions)
All assessees (engaged in business of growing/ manufacturing tea in India)
10(31)
Subsidy received from or through concerned Board under notified scheme for replantation/replacement of rubber/coffee/cardamom plants, etc. (subject to certain specified conditions)
All assessees (engaged in business of growing/ manufacturing rubber/coffee, etc., in India)
10(32)
Income of minor child clubbed u/s 64(1A) to the extent of Rs. 1,500 per child
Any individual
10(33)
Any income arising from the transfer of a capital asset (long-term/short-term) being a unit of US 64 [referred to in Schedule I of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002] and where the transfer of such assets takes place on or after 1-4-2002
All assessees
10(34)1
Income by way of dividends referred to in section 115-O
All assessees
10(35)2
Income received in respect of (a) units of a mutual fund specified under section 10(23D), (b) units from the Administrator of the specified undertaking as defined in UTI (Transfer of Undertaking & Repeal) Act, 2002, or (c) units from the specified company as defined in above UTI Repeal Act, 2002 (however, income arising from transfer of units of the Administrator of specified undertaking or of specified company/mutual fund, is not exempt)
All assessees
10(36)
Income arising from transfer of a long-term capital asset being an eligible equity share in a listed company purchased on or after 1-3-2003 but before 1-3-2004 and held for a period of 12 months or more
All assessees
10(37)
Any income chargeable under the head 'capital gains' arising from transfer of agricultural land situate in an urban area mentioned in section 2(14)(iii)(a)/(b) where transfer is by way of compulsory acquisition or consideration for transfer is determined/approved by Central Government/RBI and income has arisen from compensation or consideration for such transfer received by such assessee on or after 1-4-2004 (subject to certain conditions)
Individual/HUF
10(38)
Any income arising from the transfer of a long-term capital asset, being an equity share in a company or unit of an equity oriented fund where the transaction of sale is entered on or after the date on which Chapter VII [Securities Transaction Tax] of the Finance (No. 2) Act, 2004 comes into force (1-10-2004) and such transaction is chargeable to securities transaction tax under that Chapter
All assessees
10(39)
Specified income arising from any notified international sporting event held in India (subject to certain conditions)
Notified persons
10(40)
Income of subsidiary company by way of grant or otherwise received from an Indian holding company engaged in business of generation or transmission or distribution of power if receipt of such income is for settlement of dues in connection with reconstruction or revival of existing business of power generation (subject to certain conditions)
Company
10(41)
Income arising from transfer of capital asset of undertaking engaged in business of generation or transmission or distribution of power where such transfer is effected on or before 31-3-2006 to Indian company notified under section 80-IA(4)(v)(a)
Any assessee
10(42)
Specified income arising to a body or authority which (a) has been established/constituted/appointed under a treaty or agreement entered into by Central Government with two or more countries or a convention signed by Central Government, (b) is established/constituted/appointed not for the purposes of profit, (c) is notified by the Central Government for purposes of this clause
Body or authority
10(43)
Amount received as loan, either in lump sum or in instalments, in transaction of reverse mortgage referred to in section 47(xvi)
Any individual
10(44)
Any income of New Pension System Trust established on 27-2-2008 under Indian Trusts Act, 1882
Any person for or on behalf of New Pension System Trust
10(45)
Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC
Individual
10(46)
Any specified income arising to any notified body/authority/Board/ Trust/Commission (by whatever name called) which has been established or constituted under an Act or has been constituted by the Government with the object of regulating or administering any activity for the benefit of the general public and is not engaged in any commercial activity
Body/authority/ Board/Trust/ Commission (by whatever name called)
10(47)
Any income of a notified infrastructure debt fund set up in accordance with prescribed guidelines
Infrastructure debt fund
2F
10(48)
Any income received in India in Indian currency by a foreign company on account of sale of crude oil1 to any person in India under an approved and notified agreement or arrangement (subject to certain conditions)
Foreign company
10(49)
Income of the National Financial Holdings Company Limited (being a company set up by the Central Government) of any previous year relevant to any assessment year commencing on or before 1-4-2014.
National Financial Holdings Company Limited
10A
Profits of undertakings situated in free trade zones, electronic hardware technology parks or software technology park or any special economic zone from export of articles or things or computer software (subject to certain conditions and clarifications)1
All assessees
16D, 16DD
10AA
100% of profits from export of articles/things/services for 5 consecutive assessment years beginning with assessment year relevant to previous year in which the unit begins to manufacture or produce article or things or provide services and 50% of profits for next 5 assessment years and up to 50% of profits for next 5 assessment years as is debited to P&L account and credited to 'Special Economic Zone Re-investment Reserve Account' (subject to certain conditions)
Entrepreneur referred to in section 2(j) of Special Economic Zones Act, 2005 who begins to manufacture/produce article/thing or provide any service on or after 1-4-2006
10B
Profits derived by a 100 per cent export-oriented undertaking (subject to certain specified conditions)1
All assessees
16E
10BA
Profits of an undertaking from export of hand made articles of artistic value which requires the use of wood as the main raw material (subject to certain conditions)
All assessees
16F
11
Income from property held for charitable or religious purposes (subject to certain conditions)
Charitable/religious trust/institution
17C
13A
Specified income of political parties
Registered political parties
13B
Voluntary contributions received by Electoral Trust (subject to certain conditions)
Electoral trust
17CA



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