Non Taxable Income
Presentation
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NON TAXABLE INCOME U/S 10
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1. Agriculture Income u/s 10(1)
Agriculture Income from a land situated in India which is used for
a) the purpose of agriculture from where the revenue is derived
b) then it is fully exempt in the hands receiver u/s 10(1).
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2. Receipt by a member from his HUF u/s 10(2)
Any amount received by a member from his HUF out of the estate of income
of the HUF is not taxable in the hands of the member u/s 10(2).
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3. Share of Profit received by a partner from his partnership firm u/s 10(2A)
A partner receives 3 types of income from his firm
a) Salary/Remuneration/Commission/Bonus – taxable in the hands of partner as
his business income
b) Interest on Capital -- taxable in the hands of partner as his business income
c) Share of Profit – Exempt in the hands of partner u/s 10(2A)
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4. Leave Travel concession u/s 10(5)
Individual Travel Concession
From his employer
For himself For himself & his family
Proceeding on leave Proceeding after retirement or
termination of service
Any place in India
Actual travelling expenditure is exempt
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Note :
1. Family – Spouse & Children (dependent or independent),Parent, Brother & Sister (dependent)
2. Only 2 children (born on or after 1/10/98)
3. In case of twins – consider only one child
4. Exemption – 2 journey performed in a block of four calendar years commencing from 1986.
Rule 2B :
Different Situation Amount Exempt
1. By Air Economy class air fare –place of origin & destination
(farthest point from origin by the shortest route)
2. By Rail First class A.C.
least of – a) shortest route, b) amount spent
3. Other than Air & Rail First class A.C.
least of – a) shortest route, b) amount spent
4. Recognized public transport First class A.C.
least of – a) shortest route, b) amount spent
5. Not having recognized public First class A.C.
transport least of – a) shortest route, b) amount spent
5. Gratuity u/s 10(10)
Gratuity
Govt. employee Payment of gratuity act-1972 Others
(POGA-1972) (Non-govt employees &
not covered by POGA)
Fully exempt Exempt least of :-
1) Actual Amount Received Exempt least of :-
2) 15 days salary for every 1)Actual Amount Received
completed year of service 2)½ month average salary
3) Monetary limit– Rs.10,00,000 for every fully completed Yr.
3)Monetary limit-Rs.10,00,000
# Salary = Basic+D.A.
# Salary = Last drawn salary #Salary= Basic+D.A.+Com.
#1 month = 26 days #average of last 10 month salary
# Completed year = in excess of 6 month #Year=Only fully completed year
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6. Pension u/s 10(10A)
Pension
Uncommuted Commuted
(periodical) (lumpsum)
Govt employee Others
Fully Taxable
(govt/non govt)
Received Not Received
Fully Exempt
Gratuity Gratuity
1/3 of FCV is ½ of FCV is
Exempt Exempt
FCV = Fully commuted value
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7. Leave Salary Encashment u/s 10(10AA)
Leave Salary Encashment
During continuation of On retirement/termination
employment of employment
Fully Taxable Govt. employees Others
Exempt least of :-
1. Actual Amount Received
Fully Exempt 2. 10 times average salary
3. Cash equivalent of leave calculated
at 30 days credit for each year of
service
4. Monetary limit- Rs.300,000
# Salary = Basic+DA+Comm.
# Average of last 10 months
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8) Amount received from LIC (Life Insurance Policy) u/s 10(10D)
Any amount received from LIC towards maturity of policy is fully exempt.
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9) Amount received from statutory provident fund & public provident fund u/s 10(11)
Any amount received on maturity or withdrawal from SPF account or PPF
account is fully exempt u/s 10(11)
10) Amount received from Recognised provident fund u/s 10(12)
Any amount received from RPF account on maturity or withdrawal is fully
exempt u/s10(12) if an employee has rendered continuous services with his
employer for 5 years or more.
11) Amount received from an approved superannuation fund u/s 10(13)
Any amount received from an approved superannuation fund is fully exempt
from tax along with accrued interest there on.
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12. House Rent Allowance u/s 10(13A)
Exempt least of :
a) Actual Amount Received
b) Rent Paid – 10% of Salary
c) 50% of Salary (for metro cities)
OR
40% of Salary (for other cities)
Salary = Basic + DA + Commission (on due basis for the period the rented
accommodation is occupied by the employee only).
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13. Special allowance notified as exempt u/s 10(14)
a) Conveyance allowance for pursuing academic research & other professional
pursuits --- fully exempt (to the extent used for official work).
{expense incurred in the performance of the duties of an office like Travelling/
Transfer/ Outstation/ Daily/ Uniform allowance}
b) Area/Remote Area/Border Area/Hilly Area/Snow Covered Area Allowance –
fully exempt unless any exemption amount is not given.
c) Tribal Area Allowance – exempt upto rs. 200/-pm max.
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d) Children Education Allowance
Children Education Allowance is exempt up to Rs.100/-pm, per child for
maximum 2 children.
e) Children Hostel Allowance
Children Hostel Allowance is exempt up to Rs. 300/-pm, per child for
maximum 2 children.
f) Transport Allowance (between home & office)
Transport Allowance is exempted up to Rs.800/-pm maximum & in case of
physically handicapped, blind etc. it is Rs.1600/-pm maximum.
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14. Scholarship u/s 10(16)
Any amount received towards scholarship for educational purpose is fully
exempt u/s 10(16).
15. Award from Government u/s 10(18)
Any award from the government like Bharat Ratna, Param Vir Chakra,etc. is
exempt u/s 10(18)
Lataji receiving the Bharat Ratna by President
K.R.Narayan
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16. Income of Minor child u/s 10(32)
The income of minor child is to be first clubbed with the income of the parent u/s
64(1A). Thereafter exemption is available to the parent up to Rs.1500/- per child,
per year.
17. Dividend u/s 10(34)
Any income by way of dividends by an indian company is fully exempt.
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Thank You!
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