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Income Tax Exemptions Available to Individuals or HUFs

Income Tax Exemptions Available to Individuals or HUFs in A.Y 2019-20/ F.Y 2018-19

S.N.

Section

Particulars

Limit of exemption

Available to

1.

10(2)

Amount received by individual member from HUF. [Subject to the provisions of Section 64(2)]

Entire amount

Individual, being a member of an HUF

2.

10(2A)

Share of profit received by partners from a partnership firm.

Entire amount

Partners in a partnership firm

3.

10(4)(ii)

Interest on money standing to the credit in a Non-resident (External) account in India.

Entire amount

Person resident outside India (under FEMA Act) and person who has been permitted to maintain said account by RBI

4.

10(4B)

Interest on notified savings certificates issued before 01-06-2002 by the Central Government and subscribed to in convertible foreign exchange.

Entire Amount

Individual, being a citizen of India or a person of Indian Origin, who is a non resident.

5.

10(5)

Leave travel concession or assistance received by an employee (Subject to certain conditions and limited to amount actually spent)

Notes:

  •  The amount should be received by employee from his employer or former employer for leave to any place in India during term of service or after retirement/termination;

 •  Exemption shall be available for amount incurred in respect of fare for going anywhere in India by employee along with his family. The family means — her/his spouse and children, parents, brothers and sisters only when they are wholly or mainly dependent on the assessee.

  •  The exemption can be availed for two journeys in a block of 4 calendar years.

 •  Exemption shall be available for journey performed by a shortest route and by prescribed mode of transportations in prescribed situations.

Limited to amount actually spent and subject to maximum limits as specified

Individual – Salaried Employee

6.

10(6)(ii)

Remuneration received by Foreign Diplomats/Consulate and their staff (Subject to conditions)

Entire Amount

Individual (not being a citizen of India)

7.

10(6)(vi)

Remuneration received by non-Indian citizen as employee of a foreign enterprise for services rendered in India, if:

a) Foreign enterprise is not engaged in any trade or business in India

b) His stay in India does not exceed in aggregate a period of 90 days in such previous year

c) Such remuneration is not liable to deducted from the income of employer chargeable under this Act

Entire Amount

Individual – Salaried Employee (not being a citizen of India)

8.

10(6)(viii)

Salary received by a non-resident, for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year.

Entire Amount

Non-resident Individual – Salaried Employee (not being a citizen of India)

9.

10(6)(xi)

Remuneration received by an Individual, who is not a citizen of India, as an employee of the Government of a foreign state during his stay in India in connection with his training in any Government Office/Statutory Undertaking, etc.

Entire Amount

Individual – Salaried Employee (not being a citizen of India)

10.

10(7)

Foreign allowances or perquisites paid or allowed by Government to its employees posted outside India

Entire Amount

Individual- Salaried Employee (being a citizen of India)

11.

10(8)

Foreign income and remuneration received from Foreign Government in connection with any co-operative technical assistance programme and projects in accordance with agreement entered into by Central Government and Foreign Government (Subject to certain conditions).

Entire Amount

Individual

12.

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 organization (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State (Subject to certain conditions).

Entire Amount

Individual, being a:

a) A non-resident engaged by the agency for rendering technical services in India;

b) Non-Indian citizen; or

c) Indian citizen who is not ordinarily resident in India

13.

10(8B)

Foreign income and remuneration received by an employee off the consultant as referred to in Section 10(8A) (contract of service must be approved by the prescribed authority before commencement of service).

Entire Amount

Individual, being a:

a)  Non-Indian citizen; or

b) Indian citizen who is not ordinarily resident in India

14.

10(9)

Income of any member of family of any individual [referred to insection 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

Entire Amount

Individual

15.

10(10)

Death-cum-Retirement Gratuity received by:

(i) Government employees

Entire Amount

Individual – Salaried Employee

(ii) Other employees who are covered under Gratuity Act, 1972

Least of following amount is exempt from tax:

1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

2. Rs. 20,00,000#

3. Gratuity actually received.

*7 days in case of employee of seasonal establishment.

** Salary = Last drawn salary including DA but excluding any bonus, commission, HRA, overtime and any other allowance, benefits or perquisite

(iii) Other employees who are not covered under Gratuity Act, 1972

Least of following amount is exempt from tax:

1. 1/2 X Average Salary* X Completed years of service

2. Rs. 10,00,000

3. Gratuity actually received.

*Average salary = Average Salary of last 10 months immediately preceding the month of retirement

**Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

16.

10(10A)

Commuted value of pension received by:

a) Government employee

Entire Amount

Individual – Salaried Employee

b) Other employees

1. 1/3rd of full value of commuted pension, if gratuity is received by the employee

2. 1/2 of full value of commuted pension, if gratuity is not received by the employee

18.

10(10AA)

Encashment of unutilized earned leave at the time of retirement by:

a) Government employee;

Entire Amount

Individual – Salaried Employee

b) Other employees

Least of the following shall be exempt from tax:

a) Amount actually received

b) Unutilized earned leave* X Average monthly salary

c) 10 months Average Salary**

d) Rs. 3,00,000

*While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each year of service rendered to the current employer

**Average salary = Average Salary*** of last 10 months immediately preceding the retirement

***Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

19.

10(10B)

Retrenchment Compensation received by a workman under the Industrial Dispute Act, 1947. (Subject to certain conditions)

Least of the following shall be exempt from tax:

a) An amount calculated as per section 25F(b) of the Industrial Disputes Act, 1947;

b) Rs. 5,00,000; or

c) Amount actually received.

Individual – Salaried Workmen

20.

10(10BC)

Compensation received for any disaster from Government/ Local Authority (Subject to certain conditions)

Entire amount except for the amount allowed as deduction under this Act on account of loss caused by such disaster.

Individual or his Legal heir

21.

10(10C)

Amount received on Voluntary Retirement or Voluntary Separation (Subject to certain conditions).

Least of the following is exempt from tax:

1) Actual amount received as per the guidelines i.e. least of the following

a) 3 months salary for each completed year of services

b) Salary at the time of retirement X No. of months of services left for retirement; or

2) Rs. 5,00,000

Individual – Salaried Employee

22.

10(10CC)

Tax paid by the employer on perquisites (not provided for by way of monetary payments) given to employee

Entire Amount

Individual – Salaried Employee

23.

10(10D)

Any sum received under a Life Insurance Policy including bonus (excluding Keyman Insurance Policy) (Subject to certain conditions)

Entire Amount

Any Assessee

24.

10(11)

Payment from Public Provident Fund or Statutory Provident Fund

Entire Amount

Individual and HUF

24A. 10(11A) Any payment from an account, opened in accordance with the Sukanya Samriddhi Account Rules, 2014 Entire amount (including interest accrued on the deposit made in such account) shall be exempt from tax Individual (who deposited the amount in accordance with Sukanya Samriddhi Account Rules, 2014)

25.

10(12)

Accumulated balance payable to employee participating in recognized PF (subject to certain conditions).

To the extent provided in Rule 8 of Part A of the Fourth Schedule of the Income-Tax Act.

Individual – Salaried Employee

25A 10(12A) Sum received from the National Pension System Trust by an assessee on account of closure or opting out of the pension scheme referred to in section 80CCD. Exempt up to 40% of amount due at the time of closure or opting out of the scheme. Assessee
25B 10(12B) Partial withdrawal from National Pension System Trust (section 80CCD) Exempt up to 25% of amount of contributions made by the employee Employee

26.

10(13)

Payment from Approved Superannuation Fund on death or retirement of employee, etc. (Subject to certain conditions)

W.e.f assessment year 2017-18, any amount transferred from superannuation fund to the notified pension scheme referred to in Section 80CCD shall also be exempt from tax.

Exempt subject to certain limits

Individual – Salaried Employee

27.

10(13A)

House Rent Allowance

Least of the following is exempt from tax:

(i) 50% of salary* for metro cities** and 40% of salary for other cities

(ii) Actual HRA received

(iii) Excess of rent paid over 10% of salary*

* Salary = Aggregate of basic salary, DA (to the extent it forms part of retirement benefits) and turnover based commission

** Delhi, Mumbai, Kolkata, Chennai

Individual – Salaried Employee

28.

10(14)

Prescribed allowances for performance of official duties.

To the extent allowance actually incurred for the performance of official duties.

Individual – Salaried Employee

29.

10(15)(iib)

Interest on Notified Capital Investment Bonds notified prior to 01-06-2002.

Interest Amount

Individual and HUF

10(15)(iic)

Interest on notified Relief Bonds.

Interest Amount

Individual and HUF

10(15)(iid)

Interest on notified bonds (notified prior to 01-06-2002) purchased in foreign exchange (subject to certain conditions)

Interest Amount

Individual, being a:

a) NRI or nominee or survivor of NRI;

b) Individual to whom bonds have been gifted by NRI.

10(15)(iv)(fa)

Interest payable by scheduled bank on deposits in foreign currency where acceptance of such deposits by the bank  is duly approved by RBI.

Interest Amount

a) Non-resident

b) Individual or HUF being a resident but not ordinary resident

10(15)(iv)(i)

Interest received from Government on deposits in notified scheme out of moneys due on account of retirement.

Interest Amount

Individual, being an employee of Central and State Government or Public Sector Company.

10(15)(viii)

Interest on deposits made on or after 01.04.2005 is an offshore banking unit referred to in Section 2(u) of the Special Economic Zones Act, 2005.

Interest Amount

Person who is a non-resident or not ordinarily resident.

30.

10(16)

Scholarships granted to meet the cost of education.

Entire Amount

Individual

31.

10(17)(i)

Daily Allowances received by members of Parliament.

Entire Amount

Individual – Member of Parliament or State Legislature or any Committee thereof.

10(17)(ii)

Any Allowance received by MP under Member of Parliament (Constituency Allowance) Rules, 1986.

Entire Amount

Individual – Member of Parliament

10(17)(iii)

Any Constituency Allowance received.

Entire Amount

Individual – Member of State Legislature

32.

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

Entire Amount

Individual – Central or State Government Employees or his family member

33.

10(19)

Family pension received by the widow, children or nominated heirs of a member of the armed forces (including paramilitary forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances)

Entire Amount

Individual – Widow or children or nominated heirs of members of the armed forces.

34.

10(19A)

Notional annual value of any one palace occupied by former Ruler.

Entire amount

Individual

34A

10(23FBB)

Any income received by a unit holder from an investment fund [being of the same nature as income chargeable under the head PGBP]

That proportion of distributed income which is of the same nature as income chargeable under the head PGBP.

Unit holder of an investment fund specified under Section 115UB

34B

10(23FD)

Any income received by a unit holder from business trust, not being that proportion of the income of business trust which is in the nature of:

a) interest received or receivable from a SPV; or

b) any income from renting or leasing or letting out any real estate asset owned directly by such business trust (REIT)

Any income (except interest received from a SPV or any rental income) distributed by business trust to its unit holders

Unit holder of a business trust.

35.

10(26)

Specified income of a member of Specified Scheduled Tribes residing in Specified Areas.

Entire Amount

Individual being a member of Scheduled Tribe

36.

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).

Entire Amount

Individual, being a Sikkimese (other than Sikkimese Woman who, after 31-03-2008, marries non-Sikkimese)

37.

10(32)

Income of minor child clubbed under Section 64(1A) with parent’s income.

Rs. 1,500 per child or Income of Minor, whichever is lower

Individual

38.

10(37)

Capital gains arising on compulsory acquisition of urban agriculture land, if:

a) Compensation is received after 31-03-2004; and

b) Agriculture land was used by taxpayer or his parents for agricultural purpose during last two years

(Subject to certain conditions)

Entire Amount of capital gains

Individual and HUF

38A 10(37A) Capital Gains arising on transfer of land under Land Pooling Scheme under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015. Entire amount of capital gains Individual and HUF

39.

10(43)

Amount received by an Individual as a loan under reverse mortgage scheme referred to in Section 47(xvi)

Entire Amount

Individual

40.

10(45)

Any notified allowance/ perquisite paid to the Chairman/retired Chairman or any other member/ retired member of UPSC

Entire Amount

Individual – Chairman/ Retired Chairman or any other member/ retired member of UPSC

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