Income Tax Exemption Under Section 10

Gratuity received after death of the employee will be taxable in the hands of their legal heir who receives it.

Income tax exemption under section 10. Section 10 for salaried employees under the income tax act covers a wide range of allowances ranging from house rent and leave travel allowance to research academic allowance and uniform allowance. As per section 10 1 agricultural income earned by the taxpayer in india is exempt from tax. Under section 10 there are different sub sections that define what kind of income is exempt from tax.

Rule 2bb of the income tax rules prescribes the list of allowance which exempted under section 10 14 i of the income tax act and section 10 14 ii of the income tax act. If any money is received from the insurance company of a handicapped member. An amount equal to the least of the following will be exempt from tax x average salary of last 10 months preceding the month of retirement x completed year of service fraction of a year is ignored 10 00 000.

Exemption under section 10 10 on gratuity income received by an employee if an employee has completed five years of service with an employer the employer pays a gratuity to the employee on retirement or on the death of the employee. Agricultural income is defined under section 2 1a of the income tax act. A any rent or revenue derived from land which is situated in india and is used for agricultural purposes.

This can range from agricultural to house rent allowance. Income tax act provides exemption for the amount an employee receives as gratuity from his employer. These allowances are greatly beneficial in taking some load off the shoulders of the breadwinner.

List of exempted incomes tax free under section 10. Agricultural income is defined under section 2 1a of the income tax act. If any sum is received under the policy of key man insurance.

Salaried employees get a fixed quantity of money or other forms of allowances apart from their salary for specific requirements of the employees. Section 10 10d exemption on tax of lic if any money is received by the policyholder when a member of the family or the policyholder is suffering from any. Many of such tax rebates and exemptions come under section 10 of the income tax act.