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EXEMPTED INCOME
1. 1
INCOME TAX LAW & PRACTICE
-EXEMPTED INCOME
Prepared by,
Dr.Sangeetha R
Assistant Professor
Hindusthan College of Arts and Science, Coimbatore
2. 2
EXEMPTED INCOMES U/S 10
Section 10 of the Income Tax Act deals with exempted incomes.
Exempted incomes are those incomes, which do not form part of the total
income.
In other words, these income are not included in the total income of an
assessee for income-tax purposes.
Sl.no Section Exempted Income
1 10(1) Agricultural Income
2 10(2) Receipt from Hindu Undivided Family
3 10(2A) Partner’s share in the firm
4 10(4)(i) Interest on securities Bonds for non-residents
5 10(4)(ii) Interest on external account of a non-resident
3. 3
Exe
Sl.no Section Exempted Income
6 10(4B) Interest on specific saving certificates
7 10(5) Value of leave travel concession
8 10(6A) Tax paid on behalf of a foreign company
9 10(6B) Tax paid on behalf of non-residents / Foreign companies in
respect of other incomes
10 10(6C) Royalty or Fee for technical services
11 10(7) Allowances or Perquisites for Services rendered outside
India
12 10(8B) Income in connection under a Technical assistance
Programme
13 10(10) Gratuity
14 10(10A) Commuted Pension
15 10(10AA) Leave encashment
16 10(10B) Any compensation to an employee
17 10(10BB) Payment under Bhopal Gas Leak Disaster(processing of
claims) Act 1985
4. 4
Sl.no Section Exempted Income
18 10(10BC) Compensation on account of a Disaster received /
receivable from central or State government or Local
authority by an individual or his legal heir.
19 10(10C) Voluntary retirement payment
20 10(10CC) Tax paid by employer on income by way of perquisites on
behalf of an employee
21 10(10D)
From AY
14-15
Payment / Bonus under Insurance Policy issued on or after
01.04.2013, on the life of a person suffering with a
disability/ severe disability referred u/s 80U or u/s 80
DDB
22 10(11) Provident Fund payment including interest
23 10(12) Accumulated balance of Recognised Provident Fund
24 10(13) Superannuation fund Payment
25 10(13A) House Rent Allowance
26 10(14) Special Allowance to Employees
27 10(15)(iib) Interest on Capital Investment Bonds
5. 5
Sl.no Section Exempted Income
28 10(15)(iiic) Interest payable to European Investment Bank
29 10(15) (iv)
(i)
Interest on Retirement Benefits
30 10(15)(v) Interest on Securities and Deposits
31 10(15) (vi) Interest on Gold Deposit Bonds, 1999
32 10(16) Scholarships granted to meet the cost of education
33 10(17) Allowances to MPs and MLAs
[w.e.f AY 2007-08, Constituency allowance received is also
exempted without any limit]
34 10(17A) Amount in connection with cash or kind award instituted
by Central or State Government.
35 10(18) Pension or Family pension received by Central or State
Government employee
36 10(19) Family Pension received by a widow / children / nominated
heirs of a member of Armed Forces.
37 10(19A) Annual value of one place in the occupation of an ex-ruler.
6. 6
Sl.no Section Exempted Income
38 10(20) Income of local authorities [Municipality, Panchayat, District
Boards]
39 10(21) Income of an approved Scientific Research Association
40 10(22B) Income of a News Agency
41 10(23BB) Income of Khadi and Village Board
42 10(23BBA) Income of Religious Institutions, etc
43 10(23BBB) Income of European Economic Community
44 10(23BBC) Income of SAARC Fund for Regional Projects
45 10(23BBD) Income of the ASOSAI-SECRETARIAT [Asian Organisation
of Supreme Audit Institutions][From AY 2001-02 to 2010-11]
46 10(23BBE) Income of Insurance Regulatory and Development Authority
47 10(23BBF) Income of North-Eastern Devlopment Finance Corporation
Limited
48 10(23BBG) Income of Central Electricity Regulatory Commission [w.e.f.
AY 2008-09]
7. 7
Sl.no Section Exempted Income
49 10(23BBH) Income of the Prasar Bharati (Broadcasting Corporation of
India)
50 10(23C) Income of Certain Relief Funds
51 10(23C)(iiia) Income received by the National Foundation for Communal
Harmony
52 10(23C)
(iii ab, ac,
ad, ae) (vi)
(via)
Income of educational institutions, hospitals and medical
institutions.
53 10(23C)(iv)
and (v)
Income of notified fund, charitable / religious institution or
trust
54 10(23D) Income of Mutual Fund
55 10(23DA)
From AY 14-
15
Income of a Securitisation Trust from the activity of
Securitisation.
56 10(23EA) Income of notified Investor Protection Fund Set up by
recognised stock exchange in India [w.e.f AY 2007-08]
8. 8
Sl.no Section Exempted Income
57 10(23EB) Income of Credit Guarantee Funds Trust for Small
Industries [AY 2002-03 to 2006-07]
58 10(23EC) Income of Investor Protection fund by way of Contributions
from Commodity exchange and members there of [w.e.f AY
2008-09]
59 10(23ED)
From AY 14-
15
Income of Notified Investor Protection Fund set up by a
depository, by way of contributions from a depository.
60 10(23EE)
From AY
2016-17
Specified Income of a Notified Settlement Guarantee Fund
(Recognized)
61 10(23FB) Income of Venture Capital Company (or) Venture Capital
Fund from investment in a Venture Capital undertaking
[w.e.f AY 2008-09]
62 10(23FBA)
From AY
2016-17
Income of an Investment Fund (Except Business or
Profession)
9. 9
Sl.no Section Exempted Income
63 10(23FC)
From AY 15-
16
Income of a Business Trust by way of interest from a Special
purpose Vehicle.
64 10(23FD)
From AY 15-
16
Income received by a Unit Holder from the Business Trust
65 10(24) Income of Trade Union or Association of Trade Unions
66 10(25) Income of Statutory Provident Fund
67 10(26) Income of Member of Scheduled Tribes
68 10(26AAB) Income of an Agricultural Produce Market Committee or
Board regulating the marketing of agricultural produce
[w.e.f AY 2009-10]
69 10(30) and
(31)
Subsidy from Tea Board
70 10(32) Income of minor child upto a maximum of Rs.1500 per
minor child.
71 10(34) Dividends by a domestic company.
10. 10
Sl.no Section Exempted Income
72 10(34A)
From AY 14-15
Income arising to a shareholder from buy back of shares of
an unlisted domestic company
73 10(35) Interest on units of Mutual Fund
74 10(36) Long term capital gain arising on transfer of eligible equity
shares of a company acquired on or after 01.03.2003 but
before 01.03.2004 and held for 12 months or more.
75 10(37) Capital gain Income arising on Compulsory acquisition of
Agricultural Land in Urban areas.
76 10(38) Income from transfer of equity shares of a company or
units of an equity oriented fund not covered by Securities
Transaction Tax.
From AY 2015-16 : Capital gain arising on transfer of
units of a business trust which were acquired against
transfer of shares in a special purpose vehicle to that
business trust, will not be exempted under this clause.
77 10(39) Income from notified international sporting event held in
India.
11. 11
Sl.no Section Exempted Income
78 10(40) Grant received by a Subsidiary Company from Indian Holding
Company engaged in the business of generation or
distribution of power.
79 10(41) Capital gain arising due to transfer as mentioned in 10(40)
business above.
80 10(42) Specified income of a notified non-profit body or Authority
81 10(43) Amount received by an individual as a loan in a reverse
mortgage transaction either in instalment or Lumpsum.
82 10(44) Income of New Pension System Trust
83 10(45) Notified allowance or Perquisites to chairman / retired
chairman / member / retired members of UPSC (Union
Public Service Commission)
84 10(46) Specified Income of a notified body, authority, board, trust or
commission set up by State Central Government for Public
benefit
85 10(47) Income of a notified infrastructure debt fund
12. 12
Sl.no Section Exempted Income
86 10(48) Income of a Notified Foreign Company
87 10(49) Income of National Financial Holdings Company Ltd.
