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Income-tax and Corporate

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Tax Planning part- I

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By Navdeep Kaur
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Unit 10: Income-tax and Corporate Tax Planning
● Income-tax: Basic concepts; Residential status and tax incidence;
Exempted incomes; Agricultural income; Computation of taxable

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income under various heads; Deductions from Gross total income;
Assessment of Individuals; Clubbing of incomes

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● International Taxation: Double taxation and its avoidance mechanism;

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Transfer pricing
● Corporate Tax Planning: Concepts and significance of corporate tax

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planning; Tax avoidance versus tax evasion; Techniques of corporate

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tax planning; Tax considerations in specific business situations: Make
or buy decisions; Own or lease an asset; Retain; Renewal or
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replacement of asset; Shut down or continue operations
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● Deduction and collection of tax at source; Advance payment of tax;
E-filing of income-tax returns
The Income-tax Act, 1961

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The Income-tax Act, 1961 is the charging Statute of

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Income Tax in India. It provides for levy, administration,

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collection and recovery of Income Tax.

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Existence: 1 april 1962

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An assessee may get income from different sources, eg:-
salaries-house property income-profits and gains of business or
profession - capital gains income from other sources like interest

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on securities , lottery winnings, races etc.

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Income from each of these sources calculated first to find out the
gross total income, and then permissible deduction allowed

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arriving in total income according to sec 80 c to 80 u. Every person

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whose taxable income in the previous year exceeds the minimum
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taxable limit is liable to pay income tax during the current financial
year at the rates applicable to the current financial year.
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ASSESSMENT YEAR SEC 2(9)

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Assessment year means the period of 12 months commencing on the

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first day of April every year and ending on 31st march of the next

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year. The current assessment year is 2018 -2019

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An Assessee is liable to pay tax on the income of the previous year

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during the next following assessment year. Eg: - during the

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Assessment year 2018 -2019 income earned during 2017-18 is taxed.
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PREVIOUS YEAR SEC 3

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Previous year means the financial year immediately preceding the
assessment year. The previous year relevant to the Assessment

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year 2018 -2019 is 2017-18(1.4.17 to 31.03.18).ie the year in which

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income is earned is known as previous year.

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PERSONS SEC 2(31)

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1. Individual
2. Hindu undivided family

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3. Company

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4. Firm

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5. Association of persons or body of individual
6. Local authority

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7. Artificial juridical person
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ASSESSEE SEC 2(7)

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Assessee is a person, who has liability to pay tax or any other sum of money
under Income Tax act of 1961, so the aforesaid persons include in the

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category of Assessee. Every Assessee whose taxable income in the previous

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year exceeds the minimum taxable limit is liable to pay income tax during the
current financial year at the rates applicable to the current financial year.

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EXCEPTIONS TO THE GENERAL RULE

Generally income earned in the previous year is taxed in the

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assessment year. But there are certain exceptions to the general

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rule. Ie the previous year and assignment year are same; the
Assessee is liable to be assessed in the same year in which he

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earns the income in the following case,

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1. Income from non resident shipping company
2. Income of person leaving India
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3. Income of person likely to transfer assets to avoid tax
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4. Income from discontinued business.
Charge of income-tax.

Section 4. (1) Where any Central Act enacts that income-tax shall be charged for any

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assessment year at any rate or rates, income-tax at that rate or those rates shall be

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charged for that year in accordance with, and subject to the provisions (including

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provisions for the levy of additional income-tax) of, this Act in respect of the total
income of the previous year of every person :

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Provided that where by virtue of any provision of this Act income-tax is to be
charged in respect of the income of a period other than the previous year,

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income-tax shall be charged accordingly.
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(2) In respect of income chargeable under sub-section (1), income-tax shall be
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deducted at the source or paid in advance, where it is so deductible or payable
under any provision of this Act.
GROSS TOTAL INCOME

It is the aggregate taxable income under the different heads of income

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such as income from salary, income from house property, income from
profits or gains of business, capital gains and income from other

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sources. Ie total income computed in accordance with the provision of

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the act before making any deductions under Sec 80 C to 80 U

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TOTAL INCOME SEC 2(45)
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Total income is arrived after making various deductions from gross
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total income under section 80 C to 80 U. It is computed on the basis of
residential status of an Assessee
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RESIDENTIAL STATUS

Income tax is charged on total income earned by an Assessee

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during the previous year, but at the rate applicable to the

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assessment year. It shall be determined on the basis of the

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residential status of the Assessee. Sec.6 of the act divides the
Assessee into 3 categories’

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*Resident

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*Non resident
*Not ordinary resident

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There is basic and additional condition for determining the
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residential status of different assessee.
Basic condition (any one)
1. If he has been India in that previous year for a period or periods
amounting in all to 182 days or more

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2.if he has been India for a period or periods amounting in all to 365
days or more, during the 4 years preceding the relevant previous year

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and has been in India for a period or periods amounting in all to 60 days

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or more in that previous year.

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Additional conditions ( Both)

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1.An individual who has been in India at least 2 out of 10 previous years
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preceding the relevant previous year and
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2.The individual has been India for at least 730 days in all during the 7
previous year preceding the relevant previous year.
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Indian Citizen leaves India Indian Citizen or indian origin
during previous year for who is being outside India
employment or as member of comes to visit India During
crew of Indian Ship relevant Previous year

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1. If he has been India in that 1. If he has been India in that 1. If he has been India in that

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previous year for a period or previous year for a period or previous year for a period or

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periods amounting in all to 182 periods amounting in all to 182 periods amounting in all to 182
days or more days or more days or more

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2 in India for a period or periods

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amounting in all to 60 days or

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more in that previous year. And
if he has been India for a period
or periods amounting in all to N
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365 days or more, during the 4
years preceding the relevant
previous year
RESIDENT AND ORDINARY RESIDENT
Persons who are resident in India is popularly known as ordinary resident.
An individual, to become an ordinary resident in India in any previous year

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should also satisfy the two additional conditions along with basic

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conditions.

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NOT ORDINARILY RESIDENT INDIVIDUAL- SEC.6 (6)

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If an individual fulfills any one of the basic conditions (specified in the case

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of resident) but doesn’t satisfy both additional conditions, he becomes a
‘not ordinary resident’

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NON RESIDENT INDIVIDUAL N
As per section 2(30) of the income tax act, if an Assessee doesn’t fulfill any
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of the two basic conditions or tests will be treated as non resident Assessee
during the relevant previous year.
Whether Taxable

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Sec 7

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1 Mr. James, a citizen of U.S., arrived in India for the first time on 1st
July, 2010 and left for Nepal on 15th December 2010.
He arrived to India again on 1st January 2011 and stayed till the end

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of the financial year 2010-11. His residential status for the

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assessment year 2011-12 is

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(A) Resident (ordinarily resident)

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(B) Not ordinarily resident

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(C) Non-resident
(D) None of the above

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June 2012 https://unacademy.com/lesson/mcqs-on-basics-residential-status-of-individual-under-income-tax-in-hindi/P
ZGM2X44
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Mr. James, a citizen of U.S., arrived in India for the first time on 1st
July, 2010 and left for Nepal on 15th December 2010.
He arrived to India again on 1st January 2011 and stayed till the end

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of the financial year 2010-11. His residential status for the

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assessment year 2011-12 is

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(A) Resident (ordinarily resident)

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(B) Not ordinarily resident

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(C) Non-resident
(D) None of the above

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June 2012
2 Mr. X, after about 20 years’ stay in India, returns to America on January
29, 2009. He came to India in June 2011.
His residential status for the Assessment year 2012-13 will be

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(A) Ordinarily Resident

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(B) Not Ordinarily Resident

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(C) Non-Resident

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(D) Resident or Non-Resident

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Mr. X, after about 20 years’ stay in India, returns to America on January

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29, 2009. He came to India in June 2011.

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His residential status for the Assessment year 2012-13 will be

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(A) Ordinarily Resident
(B) Not Ordinarily Resident

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(C) Non-Resident
(D) Resident or Non-Resident

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3 Income of the previous year is not taxable in the subsequent
assessment year for which combination of the following ?
I. Income of non-resident from shipping

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II. Income of casual nature
III. Income of bodies formed for short duration

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IV. Income of a person trying to alienate his assets

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Codes :

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(1) I II III

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(2) II III IV
(3) I II IV N
(4) I III IV
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August 2016
Income of the previous year is not taxable in the subsequent
assessment year for which combination of the following ?
I. Income of non-resident from shipping
II. Income of casual nature

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III. Income of bodies formed for short duration
IV. Income of a person trying to alienate his assets

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Codes :

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(1) I II III
(2) II III IV

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(3) I II IV
(4) I III IV N
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August 2016
4 . The income tax in India is
A. direct and proportional

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B. direct and progressive

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C. indirect and proportional

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D. indirect and progressive

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5 A person leaves India permanently on 15-11-2008.The assessment year for

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income earned till 15-11-2008 in this case shall be:
a) 2007-08

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b) 2008-09
c) 2009-10 N
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d) None
Ans b
4 . The income tax in India is
A. direct and proportional

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B. direct and progressive

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C. indirect and proportional

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D. indirect and progressive

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5 A person leaves India permanently on 15-11-2008.The assessment year for

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income earned till 15-11-2008 in this case shall be:
a) 2007-08

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b) 2008-09
c) 2009-10 N
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d) None
Ans b
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6 Income tax is rounded off to:

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a) Nearest ten rupees

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b) Nearest one rupee

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c) No rounding off of tax is done
d) No need to round off

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6 Income tax is rounded off to:

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a) Nearest ten rupees

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b) Nearest one rupee As per Section 288B of the

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c) No rounding off of tax is done income tax act, the total tax
d) No need to round off computed shall be rounded off

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to the nearest Rs 10. The

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rounding off of tax would be
done on the total tax payable or

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refundable and not to various
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income tax, education cess,
surcharge etc.
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The wealth tax was abolished in the Union Budget
(2016 - 2017) presented by Union Finance Minister
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Arun Jaitley on 28 February 2015. The wealth tax
was replaced with an additional surcharge of 2 per
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cent on the super rich with a taxable income of over
1 crore annually.
Tax In India

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Direct tax Indirect tax

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- Income tax - GST
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Income tax Calculation

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Tax Rates
1. In case of an Individual (resident or non-resident) or HUF or Association of
Person or Body of Individual or any other artificial juridical person

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Assessment Year 2018-19

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Taxable income Tax Rate

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Up to Rs. 2,50,000 Nil

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Rs. 2,50,000 to Rs. 5,00,000 5%

Rs. 5,00,000 to Rs. 10,00,000


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Above Rs. 10,00,000 30%


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a) Surcharge: i) 10% of such tax, where total income exceeds 50 lakh
rupees but does not exceed one crore rupees.

However, the surcharge shall be subject to marginal relief (where income

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exceeds fifty lakh rupees, the total amount payable as income-tax and
surcharge shall not exceed total amount payable as income-tax on total

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income of fifty lakh rupees by more than the amount of income that

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exceeds fifty lakh rupees).

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ii) 15% of such tax, where total income exceeds 1 crore rupees.

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However, the surcharge shall be subject to marginal relief (where income
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exceeds one crore rupees, the total amount payable as income-tax and
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surcharge shall not exceed total amount payable as income-tax on total
income of one crore rupees by more than the amount of income that
exceeds one crore rupees).
b) Education Cess: The amount of income-tax and the applicable
surcharge, shall be further increased by education cess calculated at the

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rate of 2 % of such income-tax and surcharge.

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c) Secondary and Higher Education Cess: The amount of income-tax and

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the applicable surcharge, shall be further increased by secondary and
higher education cess calculated at the rate of 1% of such income-tax and

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surcharge.

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d) Rebate under Section 87A: The rebate is available to a resident
individual if his total income does not exceed Rs. 3,50,000. The amount of
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rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.
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Practically no tax till 3 lakh
Budget 2019:

a. Full tax rebate for individual taxpayers with annual income up to


Rs.5 lakh. The income limit eligible to avail tax rebate under section

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87A has been raised to Rs.5 lakh from Rs 3.5 lakh.

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b. This means, the new Budget increased the limit of tax rebate

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under section 87A increased from Rs.2500 to Rs.12,500.

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Total Income Tax payable before cess Rebate u/s 87A Tax Payable + 4% Cess

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2,70,000 1,000 1,000 0

3,60,000 3,000
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4,90,000 12,000 12,000 0

12,00,000 1,72,500 0 1,79,400


Till FY 2017-18 / AY 2018-19, the rate of Education cess is 3% ( 2% cess
for Primary education and 1% cess for Secondary & Higher education). It

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is levied on Personal income tax and Corporation tax.

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According to Budget 2018, the existing 3% Education cess will be replace

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by a 4% ‘Health & Education Cess‘. It means this 4% rate will be

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applicable from FY 2018-19 / AY 2019-20.

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2. In case of a resident senior citizen (who is 60 years or more at any time
during the previous year but less than 80 years on the last day of the previous
year)

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Taxable income Tax Rate

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Up to Rs. 3,00,000 Nil

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Rs. 3,00,000 - Rs. 5,00,000 5%

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Rs. 5,00,000 - Rs. 10,00,000 20%
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Above Rs. 10,00,000 30%
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a) Surcharge: i) 10% of such tax, where total income exceeds 50 lakh
rupees but does not exceed one crore rupees.

However, the surcharge shall be subject to marginal relief (where income

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exceeds fifty lakh rupees, the total amount payable as income-tax and
surcharge shall not exceed total amount payable as income-tax on total

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income of fifty lakh rupees by more than the amount of income that

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exceeds fifty lakh rupees).

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ii) 15% of such tax, where total income exceeds 1 crore rupees.

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However, the surcharge shall be subject to marginal relief (where income
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exceeds one crore rupees, the total amount payable as income-tax and
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surcharge shall not exceed total amount payable as income-tax on total
income of one crore rupees by more than the amount of income that
exceeds one crore rupees).
b) Education Cess: The amount of income-tax and the applicable

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surcharge, shall be further increased by education cess calculated at the

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rate of 2 % of such income-tax and surcharge.

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c) Secondary and Higher Education Cess: The amount of income-tax and

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the applicable surcharge, shall be further increased by secondary and

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higher education cess calculated at the rate of 1% of such income-tax and
surcharge.

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d) Rebate under Section 87A: The rebate is available to a resident
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individual if his total income does not exceed Rs. 3,50,000. The amount of
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rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.
3. In case of a resident super senior citizen (who is 80 years or more at
any time during the previous year)

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Taxable income Tax Rate

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Up to Rs. 5,00,000 Nil

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Rs. 5,00,000 - Rs. 10,00,000 20%

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Above Rs. 10,00,000 30%
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a) Surcharge: i) 10% of such tax, where total income exceeds 50 lakh
rupees but does not exceed one crore rupees.

However, the surcharge shall be subject to marginal relief (where income

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exceeds fifty lakh rupees, the total amount payable as income-tax and
surcharge shall not exceed total amount payable as income-tax on total

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income of fifty lakh rupees by more than the amount of income that

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exceeds fifty lakh rupees).

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ii) 15% of such tax, where total income exceeds 1 crore rupees.

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However, the surcharge shall be subject to marginal relief (where income
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exceeds one crore rupees, the total amount payable as income-tax and
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surcharge shall not exceed total amount payable as income-tax on total
income of one crore rupees by more than the amount of income that
exceeds one crore rupees).
b) Education Cess: The amount of income-tax and the applicable

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surcharge, shall be further increased by education cess calculated at the

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rate of 2 % of such income-tax and surcharge.

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c) Secondary and Higher Education Cess: The amount of income-tax and

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the applicable surcharge, shall be further increased by secondary and

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higher education cess calculated at the rate of 1% of such income-tax and
surcharge.

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d) Rebate under Section 87A: The rebate is available to a resident
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individual if his total income does not exceed Rs. 3,50,000. The amount of
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rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.
Notes:
Surcharge is tax on Tax

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SHEC: on IT plus Surcharge

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Partnership Firm
For the Assessment Year 2017-18 and 2018-19, a partnership firm (including
LLP) is taxable at 30%

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Local Authority

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For the Assessment Year 2017-18 and 2018-19, a local authority is taxable at

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30%.

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Domestic Company

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For the Assessment Year 2017-18 and 2018-19, a domestic company is
taxable at 30%
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for Assessment year 2018-19, tax rate would be 25% where turnover or
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gross receipt of the company does not exceed Rs. 50 crore in the previous
year 2015-16.
Minimum Alternate Tax
All companies are required to pay minimum alternate tax at the rate of

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18.5% of book profit plus surchage and education cess, if the tax liability of

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the company is less than 18.5% of book profit.

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Example, the book profit of a company before depreciation is Rs 7lakh.
After considering depreciation and other exemptions, gross taxable income

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comes to Rs4 lakh. Therefore, applicable income tax is charged @30%, i.e.

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is Rs1.2lakh. However, MAT would be Rs1.29lakh (@18.5% of Rs7lakh).
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Foreign Company
Assessment Year 2017-18 and Assessment Year 2018-19

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Nature of Income Tax Rate

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Royalty received from Government or an Indian concern in 50%

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pursuance of an agreement made with the Indian concern after
March 31, 1961, but before April 1, 1976, or fees for rendering

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technical services in pursuance of an agreement made after

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February 29, 1964 but before April 1, 1976 and where such
agreement has, in either case, been approved by the Central
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Government
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Any other income 40%


Co-operative Society
Assessment Year 2017-18 and Assessment Year 2018-19

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Taxable income Tax Rate

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Up to Rs. 10,000 10%

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Rs. 10,000 to Rs. 20,000 20%

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Above Rs. 20,000 30%
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Rate of surcharge
In case of an Individual (resident or non-resident) or HUF or Association of
Person or Body of Individual or any other artificial juridical person

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i) 10% of such tax, where total income exceeds 50 lakh

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ii) 15% of such tax, where total income exceeds 1 crore rupees.

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In case of Domestic Co.

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7% of such tax where total income 1 Crore to 10 Crore

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12% of such tax where total income more than 10 Crore

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Foreign Company
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2% of such tax where total income 1 Crore to 10 Crore
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5% of such tax where total income more than 10 Crore

Co-operative Society, LLP, Local Authority, Co-operative Society


12% of such tax, where total income exceeds 1 crore rupee
Exempted incomes
Income which are exempt from Tax under Income Tax, 1961 and covers Income Exempt under
Section 10(1) to Section 10(49).
Agricultural income [Sec. 10(1)]:

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Agricultural income in India is totally exempt from tax. However, such income is to be aggregated

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in case of certain assessees for the purpose of determining rate of tax on non-agricultural income.

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Receipts by a member from a HUF [Sec. 10(2)]:
Any sum received by an individual as a member of a Hindu Undivided Family either out of income

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of the family or out of income of estate belonging to the family is exempt from tax.

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Share of profit received by a partner from a firm [Sec. 10(2A)]:
As per section 10(2A), share of profit received by a partner from a firm is exempt from tax in the

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hands of the partner. Further, share of profit received by a partner of LLP from the LLP will be
exempt from tax in the hands of such partner. This exemption is limited only to share of profit and
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does not apply to interest on capital and remuneration received by the partner from the firm/LLP.
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Interest on Non-resident (External) Account [Sec. 10(4)]:
In the case of an individual who is not resident in India, any income by way of interest on money
standing to his credit in a Non-resident (External) account in any bank in India shall be exempt
from tax if certain conditions are satisfied.
छूट प्राप्त आय
आय, जो आयकर से 1961 के तहत कर से मु त है और धारा 10 (1) से धारा 10 (49) के तहत आय छूट शा मल है ।
कृ ष आय [सेक। 10 (1)]:
भारत में कृ ष आय को कर से पूरी तरह छूट प्राप्त है । हालां क, ऐसी आय को गैर-कृ ष आय पर कर की दर नधार्ष रत करने के
उद्दे श्य से कुछ आकलनकतार्षओं के मामले में एकत्रि कया जाना है ।

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एचयूएफ [सेक] के एक सदस्य द्वारा प्रािप्तयां। 10 (2)]:
कसी व्यि त को हंद ू अ वभािजत प रवार के एक सदस्य के रूप में प्राप्त की गई रा श या तो प रवार की आय से बाहर या प रवार

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से संबं धत संप त्ति की आय से बाहर कर से मु त है ।

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एक फमर्ष से एक साथी द्वारा प्राप्त लाभ का हस्सा [सेक। 10 (2 ए)]:

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धारा 10 (2 ए) के अनुसार, कसी फमर्ष से भागीदार द्वारा प्राप्त लाभ का हस्सा साझेदार के हाथों कर से मु त होता है । इसके
अलावा, एलएलपी के एलएलपी के एक भागीदार द्वारा प्राप्त लाभ का हस्सा ऐसे साथी के हाथों कर से मु त होगा। यह छूट केवल

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लाभ के बंटवारे तक सी मत है और फमर्ष / एलएलपी से भागीदार द्वारा प्राप्त पूंजी और पा रश्र मक पर ब्याज पर लागू नहीं होती है

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अ नवासी (बाहरी) खाते पर ब्याज [सेक। 10 (4)]:
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कसी ऐसे व्यि त के मामले में , जो भारत में नवासी नहीं है , भारत में कसी भी बैंक में गैर- नवासी (बाहरी) खाते में अपने क्रे डट
के लए खड़े पैसे पर ब्याज के माध्यम से कसी भी आय को कुछ शतर्यों से संतुष्ट होने पर कर से मु त कया जाएगा।
Remuneration to persons who are not citizens of India [Sec. 10(6)]:
In case of an individual who is not a citizen of India, the following income shall be

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exempt from tax:

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a. Remuneration received by diplomats, etc.
b. Remuneration received by a foreign national as an employee of a foreign enterprise.

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c. Non-resident employed on a foreign ship.

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d. Remuneration of employee of foreign Government during his training in India.

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Allowance or perquisites outside India [Sec. 10(7)]:

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Any allowances or perquisites paid or allowed, as such, outside India by the Government
to a citizen of India, for rendering services outside India, are exempt.
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उन व्यि तयों को पा रश्र मक जो भारत के नाग रक नहीं हैं [Sec। 10 (6)]:
ऐसे व्यि त के मामले में जो भारत का नाग रक नहीं है , नम्न आय को कर से मु त कया जाएगा:
ए। राजन यकों द्वारा प्राप्त पा रश्र मक आ द।

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ख। एक वदे शी उद्यम के एक कमर्षचारी के रूप में एक वदे शी नाग रक द्वारा प्राप्त पा रश्र मक।

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सी। वदे शी जहाज पर गैर- नवासी कायर्षरत है ।
घ। भारत में उनके प्र शक्षण के दौरान वदे शी सरकार के कमर्षचारी का पा रश्र मक।

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भारत के बाहर भत्तिा या अनुलाभ [सेक। 10 (7)]:

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कसी भी भत्तिे या अनुलाभ का भुगतान या अनुम त, जैसे क, भारत से बाहर भारत के नाग रक को भारत के बाहर सेवाएं
प्रदान करने के लए, छूट दी गई है ।

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Tax paid on behalf of foreign company deriving income by way of royalty or fees for technical
services [Section 10(6A)]

Tax paid on behalf of foreign company or non-resident in respect of other income [Section 10(6B)]

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Tax paid on behalf of foreign Government or foreign enterprise deriving income by way of lease of
aircraft or aircraft engine [Section 10(6BB)]

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Technical fees received by a notified foreign company [Section 10(6C)]

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Royalty/Fees received by non-resident from National Technical Research Organisation [Section

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10(6D)]

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Allowance/perquisites to Government employee outside India [Section 10(7)]
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Income of foreign Government employee under co-operative technical assistance programme
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[Section 10(8)]

Remuneration or fees received by a non-resident consultant/its foreign employees [Section 10(8A),


(8B)]
तकनीकी सेवाओं के लए रॉयल्टी या फीस के माध्यम से आय प्राप्त करने वाली वदे शी कंपनी की ओर से चुकाया गया कर
[धारा 10 (6A)]

अन्य आय के संबंध में वदे शी कंपनी या अ नवासी की ओर से दया गया कर [धारा १० (६ बी)]

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वमान या वमान इंजन के पट्टे के माध्यम से आय प्राप्त करने वाले वदे शी सरकार या वदे शी उद्यम की ओर से चुकाया
गया कर [धारा 10 (6BB)]

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एक अ धसू चत वदे शी कंपनी द्वारा प्राप्त तकनीकी शुल्क [धारा 10 (6 सी)]

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राष्ट्रीय तकनीकी अनुसंधान संगठन से अ नवासी द्वारा प्राप्त रॉयल्टी / फीस [धारा 10 (6 डी)]

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भारत के बाहर सरकारी कमर्षचारी को भत्तिा / अनुलाभ [धारा 10 (7)]

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सहकारी तकनीकी सहायता कायर्षक्रम [धारा 10 (8)] के तहत वदे शी सरकारी कमर्षचारी की आय
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एक अ नवासी सलाहकार / उसके वदे शी कमर्षचा रयों द्वारा प्राप्त पा रश्र मक या शुल्क [धारा 10 (8A), (8B)]
Income of a family member of an employee serving under co-operative technical assistance
programme [Section 10(9)]

Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]

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Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Section

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10(10)(ii)]

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As per section 10(10)(ii), exemption in respect of gratuity in case of employees covered by the
Payment of Gratuity Act, 1972 will be lower of following :

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15 days’ salary × years of service.
Maximum amount specified, e., Rs. 20,00,000*.

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Gratuity actually received.
* Limit increased from Rs. 10 lakhs to Rs. 20 lakhs vide Notification No. 1420(E), dated 29-3-2018.
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Note:

1) Instead of 15 days’ salary, only 7 days salary will be taken into consideration in case of employees of
seasonal establishment.

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2) 15 days’ salary = Salary last drawn × 15/26

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3) Salary for this purpose will include basic salary and dearness allowance only. Items other than basic
salary and dearness allowance are not to be considered.

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4) In case of piece rated employee, 15 days’ salary will be computed on the basis of average of total

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wages (excluding overtime wages) received for a period of three months immediately preceding the
termination of his service.

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5) Part of the year, in excess of 6 months, shall be taken as one full year.
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सहकारी तकनीकी सहायता कायर्षक्रम के तहत सेवारत एक कमर्षचारी के प रवार के सदस्य की आय [धारा १० (९)]

सरकारी कमर्षचा रयों द्वारा प्राप्त मृत्यु-सह-सेवा नवृ त्ति ग्रेच्युटी [धारा 10 (10) (i)]

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ग्रेच्युटी अ ध नयम, 1972 [धारा 10 (10) (ii) के भुगतान द्वारा कवर कए गए एक गैर-सरकारी कमर्षचारी द्वारा प्राप्त
ग्रेच्युटी

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धारा 10 (10) (ii) के अनुसार, ग्रेच्युटी के भुगतान अ ध नयम, 1972 द्वारा कवर कए गए कमर्षचा रयों के मामले में ग्रेच्युटी

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के संबंध में छूट नम्न ल खत में से नम्न होगी:
15 दनों का वेतन × वषर्यों की सेवा।

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अ धकतम रा श न दर्ष ष्ट, ई।, रु। 20,00,000 *।
ग्रेच्युटी वास्तव में प्राप्त की।

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* सीमा रुपये से बढ़ गई। 10 लाख से रु। दनांक २०-३०-२०१ No. की अ धसूचना संख्या १४२० (ई), २० लाख।
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Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Section
10(10)(iii)]
As per section 10(10)(iii), exemption in respect of gratuity in case of employees not covered by the Payment
of Gratuity Act, 1972 will be lower of following :
● Half month’s salary for each completed year of service, e.,

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[Average monthly salary × 1/2] × Completed years of service. .

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● 10,00,000.
● Gratuity actually received.

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Note:

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1) Average monthly salary is to be computed on the basis of average of salary for 10 months immediately
preceding the month of retirement.

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2) Salary for this purpose will include basic salary, dearness allowance, if the terms of service so provide and
commission based on fixed percentage of turnover achieved by the employee.

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3) While computing years of service, any fraction of a year is to be ignored. Pension [Section 10(10A)]:
As per section 10(10A), any commuted pension, i.e., accumulated pension in lieu of monthly pension
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received by a Government employee is fully exempt from tax. Exemption is available only in respect of
commuted pension and not in respect of un-commuted, i.e., monthly pension. Exemption in respect of
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commuted pension in case of a non-Government employee will be as follows:
● If the employee receives gratuity, one third of full value of commuted pension will be exempt from tax
under section 10(10A).
● If the employee does not receive gratuity, one half of full value of commuted pension will be exempt
from tax under section 10(10A).
गैर-सरकारी कमर्षचारी द्वारा प्राप्त ग्रेच्युटी पेमेंट ऑफ ग्रेच्युटी अ ध नयम, 1972 [धारा 10 (10) (iii)] द्वारा प्राप्त नहीं की गई
है ।
धारा 10 (10) (iii) के अनुसार, ग्रेच्युटी के भुगतान अ ध नयम, 1972 द्वारा कवर नहीं कए जाने वाले कमर्षचा रयों के मामले
में ग्रेच्युटी के संबंध में छूट नम्न ल खत में से नम्न होगी:

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सेवा के प्रत्येक पूणर्ष वषर्ष के लए आधे महीने का वेतन, ई।

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[औसत मा सक वेतन × 1/2] × सेवा के वषर्यों को पूरा कया। ।

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10,00,000।
ग्रेच्युटी वास्तव में प्राप्त की।
ध्यान दें :

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1) औसत मा सक वेतन की गणना सेवा नवृ त्ति के महीने से पहले 10 महीने के वेतन के औसत के आधार पर की जानी है ।
2) इस प्रयोजन के लए वेतन में मूल वेतन, महं गाई भत्तिा शा मल होगा, य द सेवा की शतर्तें कमर्षचारी द्वारा प्राप्त टनर्षओवर के

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निश्चत प्र तशत के आधार पर प्रदान और कमीशन करती हैं।
3) सेवा के वषर्यों की गणना करते समय, वषर्ष के कसी भी अंश को अनदे खा करना है । पें शन [धारा १० (१० ए)]:

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धारा 10 (10 ए) के अनुसार, कसी भी क मटे ड पें शन, यानी, सरकारी कमर्षचारी को मलने वाली मा सक पें शन के एवज में
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सं चत पें शन को कर से पूरी तरह छूट प्राप्त है । छूट केवल कम्यूटेड पें शन के संबंध में उपलब्ध है और अन-क मटे ड, यानी
मा सक पें शन के संबंध में नहीं है । गैर-सरकारी कमर्षचारी के मामले में कम्यूटेड पें शन के संबंध में छूट इस प्रकार होगी:
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य द कमर्षचारी ग्रेच्युटी प्राप्त करता है , तो कम्यूटेड पें शन के पूणर्ष मूल्य का एक तहाई भाग 10 (10 ए) के तहत कर से मु त
होगा।
य द कमर्षचारी को ग्रेच्युटी नहीं मलती है , तो कम्यूटेड पें शन के पूणर्ष मूल्य का आधा हस्सा धारा 10 (10 ए) के तहत कर से
मु त होगा।
Leave salary [Section 10(10AA)]
Retrenchment compensation [Section 10(10B)]

Payments under Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 [Sec.
10(10BB)]:

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Any payments made, under the above Act or any scheme made thereunder, shall be
exempt from tax in the hands of the recipient.

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Exemption for compensation received or receivable on account of any disaster [Sec. 10(10BC)]:

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Payment at the time of voluntary retirement [Section 10(10C)]

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Tax on non-monetary perquisites paid by employer [Sec. 10(10CC)]:

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section 10(10CC) tax paid by employer (on behalf of employee) on non-monetary perquisites will
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be exempt from tax in the hands of employees
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Amount paid on life insurance policy [Section 10(10D)]
वेतन छोड़ें [धारा 10 (10AA)]
छं टनी मुआवजा [धारा 10 (10B)]

भोपाल गैस रसाव आपदा (दावों का प्रसंस्करण) अ ध नयम, 1985 के तहत भुगतान [सेक। 10 (10BB)]:

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उपरो त अ ध नयम या उसके तहत की गई कसी भी योजना के तहत कए गए कसी भी भुगतान को प्राप्तकतार्ष के हाथों

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में कर से छूट दी जाएगी।

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कसी भी आपदा के कारण प्राप्त या प्राप्त होने वाले मुआवजे की छूट [सेक। 10 (10BC)]:

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स्वैिच्छक सेवा नवृ त्ति के समय भुगतान [धारा 10 (10 सी)]

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नयो ता द्वारा भुगतान कए गए गैर-मौ द्रक अनुलाभ पर कर [सेक। 10 (10cc)]:

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गैर-मौ द्रक अनुलाभ पर नयो ता (कमर्षचारी की ओर से) धारा 10 (10CC) का भुगतान कमर्षचा रयों के हाथों कर से मु त
होगा
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जीवन बीमा पॉ लसी पर दी गई रा श [धारा १० (१० डी)]
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Statutory Provident Fund
It is set up under the provisions of the Provident Funds Act, 1925 maintained by the
Government and Semi-Government organisations, local authorities, railways,
universities and educational institutions.

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Recognized Provident Fund

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Any establishment which is recognized by the Commissioner of Income Tax is called as
recognized provident fund. To be recognized, an organization of 20 or more members

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shall invest funds as per the guidelines of PF Act, 1952, and can get an approval from

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the PF Commissioner of Income-tax.

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Public Provident Fund
The Central Government has established the public provident fund where any member,
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either salaried employee or a business employed person shall participate by opening a
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PF account at the State Bank of India or other nationalized banks.
Any amount subjected to a minimum of Rs.500 and maximum of Rs.1,50,000 per annum
may be deposited under this PF account, on which a certain sum of Interest is credited
every year, which could be repayable after 15 years.
वैधा नक भ वष्य न ध
यह सरकार और अधर्ष-सरकारी संगठनों, स्थानीय प्रा धकरणों, रे लवे, वश्व वद्यालयों और शैक्ष णक संस्थानों द्वारा बनाए
रखे गए भ वष्य न ध अ ध नयम, 1925 के प्रावधानों के तहत स्था पत कया गया है ।

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मान्यता प्राप्त भ वष्य न ध
कसी भी प्र तष्ठान को आयकर आयु त द्वारा मान्यता प्राप्त भ वष्य न ध कहा जाता है । मान्यता प्राप्त करने के लए,

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20 या अ धक सदस्यों का एक संगठन पीएफ अ ध नयम, 1952 के दशा नदर्दे शों के अनुसार धन का नवेश करे गा, और
आयकर आयु त के पीएफ आयु त से अनुमोदन प्राप्त कर सकता है ।

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सामान्य भ वष्य न ध

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केंद्र सरकार ने सावर्षज नक भ वष्य न ध की स्थापना की है , जहां कोई भी सदस्य, या तो वेतनभोगी कमर्षचारी या व्यवसाय से
जुड़ा व्यि त भारतीय स्टे ट बैंक या अन्य राष्ट्रीयकृ त बैंकों में पीएफ खाता खोलकर भाग लेगा।

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इस पीएफ खाते के तहत न्यूनतम रु। 500 और अ धकतम रु। 1,50,000 प्र त वषर्ष जमा कया जा सकता है , िजस पर हर
साल एक निश्चत ब्याज रा श जमा की जाती है , िजसे 15 वषर्यों के बाद चुकाया जा सकता है ।
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Recognised Provident Fund

Employer’s Contribution Employer’s contribution to such fund, up to 12% of salary is not treated as
income of the employee (see Note 1).

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Interest Interest credited to such fund up to 9.5% per annum is exempt in the hands
of the employee, interest in excess of 9.5% is charged to tax in the hands of

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the employee.

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Amount received at the If certain conditions are satisfied, then lump sum amount received from such
time of termination fund, at the time of termination of service, is exempt in the hands of

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employees.

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Un-recognised Provident Fund

Employer’s Contribution
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Employer’s contribution to such fund is not treated as income of the
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employee.

Interest Interest credited to such fund is exempt in the hands of the employees.
Exemption in respect of amount received from public provident fund/statutory provident fund/ recognised
provident fund/ un-recognised provident fund [Section 10(11)/(12)]

Statutory Provident Fund

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Employer’s Contribution Employer’s contribution to such fund is not treated as income of the
employee.

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Interest Interest credited to such fund is exempt in the hands of the employee.

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Amount received at the time Lump sum amount received from such fund, at the time of termination of

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of termination service is exempt in the hands of employees.

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N
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Public Provident Fund

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Employer’s Contribution Employers do not contribute to such fund.

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Interest Interest credited to such fund is exempt.

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Amount received at the time of Lump sum amount received from such fund at the time of

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termination termination of service is exempt from tax.

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Payment from approved superannuation fund in specified circumstances and subject to certain
limits [Section 10(13)] (pension program created by a company for the benefit of its employees.)

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House rent allowance [Section 10(13A)]

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As per section 10(13A), read with rule 2A, the exemption in respect of HRA will be lower of the
following amounts:

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(1) 50% of salary, when residential house is situated at Mumbai, Kolkata, Delhi or Chennai and
40% of salary where residential house is situated at any other place.

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(2) HRA actually received by the employee in respect of the period during which rental

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accommodation is occupied by the employee during the previous year.

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(3) Rent paid in excess of 10% of salary.
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Salary will include basic salary, dearness allowance forming part of salary while computing all
retirement benefits and commission based on fixed percentage of turnover achieved by the
employee. Apart from this, salary for this purpose does not include any other
allowances/perquisites.
न दर्ष ष्ट प रिस्थ तयों में अनुमो दत सुपरनेशन फंड से भुगतान और कुछ सीमाओं के अधीन [धारा 10 (13)] (अपने कमर्षचा रयों
के लाभ के लए कंपनी द्वारा बनाया गया पें शन कायर्षक्रम।)

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मकान कराया भत्तिा [धारा १० (१३ ए)]

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धारा 10 (13 ए) के अनुसार, नयम 2 ए के साथ पढ़ें , एचआरए के संबंध में छूट नम्न ल खत रा शयों में से कम होगी:

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(1) वेतन का 50%, जब आवासीय घर मुंबई, कोलकाता, दल्ली या चेन्नई में िस्थत है और 40% वेतन जहां आवासीय घर

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कसी अन्य स्थान पर िस्थत है ।

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(2) एचआरए वास्तव में उस अव ध के संबंध में कमर्षचारी द्वारा प्राप्त कया जाता है , िजसके दौरान पछले वषर्ष के दौरान कराये
के आवास पर कमर्षचारी द्वारा कब्जा कर लया जाता है ।

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(3) 10% से अ धक वेतन में कराए का भुगतान।
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वेतन में मूल वेतन, महं गाई भत्तिा शा मल होगा जो कमर्षचारी द्वारा प्राप्त टनर्षओवर के निश्चत प्र तशत के आधार पर सभी
©
सेवा नवृ त्ति लाभों और कमीशन की गणना करते हु ए वेतन का हस्सा होगा। इसके अलावा, इस उद्दे श्य के लए वेतन में कोई
अन्य भत्तिे / अनुलाभ शा मल नहीं हैं।
Prescribed allowances or benefits [Section 10(14)]

Allowances Exemption Limit

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Children Education Allowance Up to Rs. 100 per month per child up to a
maximum of 2 children is exempt

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Hostel Expenditure Allowance Up to Rs. 300 per month per child up to a

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maximum of 2 children is exempt

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N
Transport Allowance granted to an employee to (who is a
blind and handicap) meet expenditure on commuting
Rs. 3,200 per month for blind and handicapped
employees is exempt
©
between place of residence and place of duty
Allowance granted to an employee working in any Amount of exemption shall be lower of following:
transport business to meet his personal expenditure a) 70% of such allowance; or
during his duty performed in the course of running of such b) Rs. 10,000 per month.
transport from one place to another place provided

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employee is not in receipt of daily allowance.

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Conveyance Allowance granted to meet the expenditure Exempt to the extent of expenditure incurred for
on conveyance in performance of duties of an office official purposes

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Travelling Allowance to meet the cost of travel on tour or Exempt to the extent of expenditure incurred for

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on transfer official purposes

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Daily Allowance to meet the ordinary daily charges Exempt to the extent of expenditure incurred for

normal place of duty


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incurred by an employee on account of absence from his official purposes
©
Helper/Assistant Allowance Exempt to the extent of expenditure incurred for
official purposes
Research Allowance granted for encouraging the Exempt to the extent of expenditure incurred
academic research and other professional pursuits for official purposes

Uniform Allowance Exempt to the extent of expenditure incurred

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for official purposes

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Special compensatory Allowance (Hilly Areas) (Subject Amount exempt from tax varies from Rs. 300 to

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to certain conditions and locations) Rs. 7,000 per month.

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Border area, Remote Locality or Disturbed Area or Amount exempt from tax varies from Rs. 200 to
Difficult Area Allowance (Subject to certain conditions Rs. 1,300 per month.

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and locations)

Tribal area allowance in (a) Madhya Pradesh (b) Tamil Up to Rs. 200 per month

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Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f)
N
Assam (g) West Bengal (h) Bihar (i) Orissa
©
Compensatory Field Area Allowance. If this exemption is Up to Rs. 2,600 per month
taken, employee cannot claim any exemption in respect
of border area allowance (Subject to certain conditions
and locations)
Compensatory Modified Area Allowance. If this exemption is taken, Up to Rs. 1,000 per month
employee cannot claim any exemption in respect of border area
allowance (Subject to certain conditions and locations)

Counter Insurgency Allowance granted to members of Armed Up to Rs. 3,900 per month
Forces operating in areas away from their permanent locations. If

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this exemption is taken, employee cannot claim any exemption in
respect of border area allowance (Subject to certain conditions

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and locations)

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Underground Allowance to employees working in uncongenial, Up to Rs. 800 per month
unnatural climate in underground mines

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High Altitude Allowance granted to armed forces operating in high a) Up to Rs. 1,060 per month (for altitude of 9,000
altitude areas (Subject to certain conditions and locations) to 15,000 feet)

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b) Up to Rs. 1,600 per month (for altitude above
15,000 feet)
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Highly active field area allowance granted to members of armed Up to Rs. 4,200 per month
©
forces (Subject to certain conditions and locations)

Island Duty Allowance granted to members of armed forces in Up to Rs. 3,250 per month
Andaman and Nicobar and Lakshadweep group of Island (Subject
to certain conditions and locations)
Interest on securities [Section 10(15)]

Section Income Exemption to

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10(15)(i) Interest, premium on redemption, or other payment on All assessees
notified securities, bonds, certificates, and deposits, etc.

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(subject to notified conditions and limits)

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10(15)(iib) Interest on notified Capital Investment Bonds notified prior to Individual/HUF
1-6-2002

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10(15)(iic) Interest on notified Relief Bonds Individual/HUF

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10(15)(iid) Interest on notified bonds (notified prior to 1-6-2002) Individual – NRI/

conditions)
N
purchased in foreign exchange (subject to certain nominee or survivor of
NRI/individual to whom
©
bonds have been gifted
by NRI
Educational scholarship [Section 10(16)]
Any amount received as educational scholarship (i.e., scholarship to meet the cost of education is
exempt from tax in the hands of recipient).

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Daily allowance to a Member of Parliament [Section 10(17)]

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Any Constituency allowance received by a Member of State Legislature. Awards [Section 10(17A)]

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Pension to gallantry award winner [Section 10(18)]
Pension received by an individual who was employee of the Central Government or State

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Government and who has been awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or any
other notified gallantry award is exempt from tax.

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Family pension received by any member of such individual is also exempt.
N
©
Family pension received by the family members of armed forces [Section 10(19)]
शै क्षक छात्रिवृ त्ति [धारा 10 (16)]
शै क्षक छात्रिवृ त्ति के रूप में प्राप्त कसी भी रा श (यानी, शक्षा की लागत को पूरा करने के लए छात्रिवृ त्ति प्राप्तकतार्ष के
हाथों में कर से मु त है )।

संसद सदस्य के लए दै नक भत्तिा [धारा 10 (17)]

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राज्य वधानमंडल के कसी सदस्य द्वारा प्राप्त कोई भी नवार्षचन क्षेत्रि भत्तिा। पुरस्कार [धारा १० (१) ए)]

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वीरता पुरस्कार वजेता को पें शन [धारा 10 (18)]
पें शन एक ऐसे व्यि त को मलती है जो केंद्र सरकार या राज्य सरकार का कमर्षचारी था और िजसे परमवीर चक्र या

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महावीर चक्र या वीर चक्र या कसी अन्य अ धसू चत वीरता पुरस्कार से सम्मा नत कया गया है ।

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ऐसे व्यि त के कसी भी सदस्य द्वारा प्राप्त पा रवा रक पें शन भी छूट है ।

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सशस्त्रि बलों के प रवार के सदस्यों द्वारा प्राप्त पा रवा रक पें शन [धारा 10 (19)]
N
©
Annual value of one palace [Section 10(19A)]

Annual value of any one palace in the occupation of a former ruler is exempt from tax under

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section 10(19A).

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Income of local authority [Section 10(20)]

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The following income of a local authority is exempt from tax:
a) Income which is chargeable under the head “Income from house property”, “Capital gains” or

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“Income from other sources” or
b) Income from a trade or business carried on by it which accrues or arises from the supply of a

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commodity or service (not being water or electricity) within its own jurisdictional area or
c) Income from business of supply of water or electricity within or outside its own jurisdictional
area. N
©
एक महल का वा षर्षक मूल्य [धारा 10 (19A)]

एक पूवर्ष शासक के कब्जे में कसी एक महल का वा षर्षक मूल्य धारा 10 (19 ए) के तहत कर से मु त है ।

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स्थानीय प्रा धकरण की आय [धारा १० (२०)]

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स्थानीय प्रा धकरण की नम्न ल खत आय को कर से मु त कया गया है :

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क) आय जो "गृह संप त्ति से आय", "पूंजीगत लाभ" या "अन्य स्रोतों से आय" या के तहत प्रमुख है
ख) अपने द्वारा कए गए व्यापार या व्यवसाय से आय जो अपने अ धकार क्षेत्रि में या उसके भीतर एक वस्तु या सेवा (पानी

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या बजली नहीं होने) की आपू तर्ष से अिजर्षत या उत्पन्न होती है ।
ग) अपने अ धकार क्षेत्रि के भीतर या बाहर पानी या बजली की आपू तर्ष के व्यवसाय से आय।

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N
©
➔ Income of research association [Section 10(21)]
➔ Income of a news agency [Section 10(22B)]
➔ Income of a professional association [Section 10(23A)]
Any income (other than income from house property and income from rendering any specific service or

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income by way of interest or dividend on investment) of an professional institution/association is

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exempt from tax

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➔ Income received on behalf of Regimental Fund [Section 10(23AA)]
➔ Income of a fund established for welfare of employees [Section 10(23AAA)]

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➔ Income of pension fund [Section 10(23AAB)]
➔ Income from Khadi or village industry [Section 10(23B)]

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➔ Income of European Economic Community [Section 10(23BBB)
➔ Income of SAARC fund [Section 10(23BBC)]

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➔ Income of Secretariat of Asian Organisation of Supreme Audit Institutions [Section 10(23BBD)]
➔ Income of Insurance Regulatory and Development Authority [Section 10(23BBE)]
N
➔ Income of North-Eastern Development Financial Corporation Limited [Section 10(23BBF)]
©
➔ Income of Central Electricity Regulatory Commission [Section 10(23BBG)]
➔ Income of the Prasar Bharati [Section 10(23BBH)]
Any income of the Prasar Bharati (Broadcasting Corporation of India) established under section 3(1) of
the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 is exempt from tax.
➔ Income of certain national funds[Section 10(23C)(i)/(ii)/(iii)]
अनुसंधान संघ की आय [धारा 10 (21)]
एक समाचार एजेंसी की आय [धारा 10 (22B)]
एक पेशव
े र एसो सएशन की आय [धारा 10 (23A)]
एक पेशवे र संस्थान / संघ के कसी भी आय (घर की संप त्ति से आय के अलावा और कसी व शष्ट सेवा या नवेश के माध्यम से
आय या लाभांश का प्र तपादन करने से आय) कर से मु त है

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रे िजमें टल फंड की ओर से प्राप्त आय [धारा 10 (23AA)]
कमर्षचा रयों के कल्याण के लए स्था पत न ध की आय [धारा 10 (23AAA)]

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पें शन फंड की आय [धारा 10 (23AAB)]

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खादी या ग्राम उद्योग से आय [धारा 10 (23B)]
यूरोपीय आ थर्षक समुदाय की आय [धारा 10 (23BBB)

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साकर्ष न ध की आय [धारा 10 (23BBC)]
सवर्वोच्च लेखा परीक्षा संस्थानों के ए शयाई संगठन के स चवालय की आय [धारा 10 (23BBD)]

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बीमा व नयामक और वकास प्रा धकरण की आय [धारा 10 (23BBE)]
पूवर्वोत्तिर वकास वत्तिीय नगम ल मटे ड की आय [धारा 10 (23BBF)]
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केंद्रीय वद्युत नयामक आयोग की आय [धारा 10 (23BBG)]
प्रसार भारती की आय [धारा 10 (23BBH)]
©
प्रसार भारती (भारत का प्रसारण नगम) अ ध नयम, 1990 की धारा 3 (1) के तहत स्था पत प्रसार भारती (भारत का प्रसारण
नगम) की कोई भी आय कर से मु त है ।
कुछ राष्ट्रीय फंडों की आय [धारा 10 (23C) (i) / (ii) / (iii)]
➔ Income of National Foundation for Communal Harmony [Section 10(23C)(iiia)]
➔ Income of Swachh Bharat Kosh [Section 10(23C)(iiiaa)]
➔ Income of Clear Ganga Fund [Section 10(23C)(iiiaaa)]

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➔ Income of Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund [Section

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10(23C)(iiiaaaa)]
➔ Income of Educational Institutions [Section 10(23C)(iiiab)/(iiiad)/(vi)] Section 10(23C)(iiiab)

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➔ Income of Hospital [Section 10(23C)(iiiac)/(iiiae)/(via)] If:

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1) If the hospital or other institution is wholly or substantially financed by the Government then
exemption would be available under section 10(23C)(iiiac).

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2) If the aggregate annual receipt of such hospital or institution do not exceed Rs. 1 Crore then

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exemption would be available under section 10(23C)(iiiae).

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3) If the hospital is approved by the prescribed authority, i.e., by Commissioners of Income-tax
(Exemptions) as authorized by CBDT via Notification No. 76/2014 dated 1-12-2014 then exemption
©
would be available under section 10(23C)(via).
सांप्रदा यक सद्भाव के लए राष्ट्रीय फाउं डेशन की आय [धारा 10 (23C) (iiia)]
स्वच्छ भारत कोष की आय [धारा 10 (23C) (iiiaa)]
गंगा न ध की आय [धारा 10 (23C) (iiiaaa)]
मुख्यमंत्रिी राहत कोष या उपराज्यपाल के राहत कोष की आय [धारा 10 (23C) (iiiaaaa)]

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शै क्षक संस्थानों की आय [धारा 10 (23C) (iiiab) / (iiiad) / (vi)] धारा 10 (23C) (iiiab)

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अस्पताल की आय [धारा 10 (23C) (iiiac) / (iiiae) / (के माध्यम से) य द:
1) य द अस्पताल या अन्य संस्थान पूरी तरह से या सरकार द्वारा वत्तिपो षत हैं तो धारा 10 (23 सी) (iiiac)

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के तहत छूट उपलब्ध होगी।

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2) य द ऐसे अस्पताल या संस्थान की कुल वा षर्षक रसीद रु। से अ धक नहीं है । 1 करोड़ तब छूट धारा 10

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(23C) (iiiae) के तहत उपलब्ध होगी।

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3) य द अस्पताल को नधार्ष रत प्रा धकारी द्वारा अनुमो दत कया गया है , अथार्षत, आयकर आयु तों (छूट)
द्वारा सीबीडीटी द्वारा अ धसूचना संख्या 76/2014 दनांक 1-12-2014 के माध्यम से प्रा धकृ त कया गया है
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तो छूट धारा 10 (23C) के तहत उपलब्ध होगी। )(के ज रए)।
©
➔ Income of Charitable Institution or Fund [Section 10(23C)(iv)]

➔ Income of mutual fund [Section 10(23D)]


Any income of following mutual funds (subject to provisions of sections 115R to 115T) is exempt

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from tax:
A mutual fund registered under the Securities and Exchange Board of India Act or regulation made

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thereunder.
A mutual fund set-up by a public sector bank, or a public financial institution or authorised by RBI

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(subject to conditions notified by the Central Government).

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➔ Income of a securitisation trust [Section 10(23DA)]
➔ Income of notified investor protection fund [Section 10(23EA)]

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➔ Income of Credit Guarantee Fund Trust [Section 10(23EB)]
➔ Income of the notified investor protection fund set-up by commodity exchange [Section


10(23EC)] N
Income of Investor Protection Fund set by a depository [Section 10(23ED)]
©
धमार्षथर्ष संस्था या न ध की आय [धारा 10 (23C) (iv)]

म्यूचुअल फंड की आय [धारा 10 (23D)]


नम्न ल खत म्युचुअल फंड की कोई आय (धारा 115 आर से 115 टी के प्रावधानों के अधीन) को कर से छूट दी गई है :

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भारतीय प्र तभू त और व नमय बोडर्ष अ ध नयम या व नयमन के तहत पंजीकृ त एक म्यूचुअल फंड।

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एक सावर्षज नक क्षेत्रि के बैंक या एक सावर्षज नक वत्तिीय संस्थान द्वारा स्था पत म्यूचुअल फंड या RBI द्वारा अ धकृ त (केंद्र
सरकार द्वारा अ धसू चत शतर्यों के अधीन)।

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एक प्र तभू तकरण ट्रस्ट की आय [धारा 10 (23DA)]
अ धसू चत नवेशक सुरक्षा न ध की आय [धारा 10 (23EA)]

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क्रे डट गारं टी फंड ट्रस्ट की आय [धारा 10 (23EB)]
कमो डटी ए सचें ज द्वारा स्था पत अ धसू चत नवेशक सुरक्षा न ध की आय [धारा 10 (23EC)]

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डपॉिजटरी द्वारा नधार्ष रत नवेशक सुरक्षा न ध की आय [धारा 10 (23ED)]
N
©
➔ Income of a registered trade union [Section 10(24)]
➔ Income of provident fund [Section 10(25)]

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Following income is exempt from tax under this section:

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1. Interest on securities held by a statutory provident fund and any capital gains

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arising from such securities.
2. Any income received by the trustee on behalf of a recognised provident fund or an

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approved superannuation fund or an approved gratuity fund; and
3. Any income received by the Board of Trustees on behalf of Deposit-linked

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Insurance Fund.

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➔ Income of the Employees’ State Insurance Fund [Section 10(25A)]
N
©
Any income of the Employees’ State Insurance Fund of the Employees’ State Insurance
Corporation set-up under the provisions of the Employees’ State Insurance Act, 1948 is
exempt from tax under section 10(25A).

➔ Income of a member of a Scheduled Tribe [Section 10(26)]


एक पंजीकृ त ट्रे ड यू नयन की आय [धारा 10 (24)]
भ वष्य न ध की आय [धारा 10 (25)]

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इस धारा के तहत नम्न ल खत आय को कर से मु त कया गया है :

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सां व धक भ वष्य न ध और इस तरह की प्र तभू तयों से उत्पन्न होने वाले कसी भी पूंजीगत लाभ द्वारा प्र तभू तयों पर

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ब्याज।
ट्रस्टी को मान्यता प्राप्त भ वष्य न ध या अनुमो दत सुपरनेशन फंड या स्वीकृ त ग्रेच्युटी फंड की ओर से प्राप्त कोई भी आय;

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तथा
डपॉिजट- लं ड इंश्योरें स फंड की ओर से न्यासी बोडर्ष द्वारा प्राप्त कोई भी आय।

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कमर्षचारी राज्य बीमा कोष की आय [धारा 10 (25A)]
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कमर्षचारी राज्य बीमा नगम, 1948 के प्रावधानों के तहत स्था पत कमर्षचारी राज्य बीमा नगम के कमर्षचारी राज्य बीमा कोष
©
की कोई भी आय धारा 10 (25 ए) के तहत कर से मु त है ।

अनुसू चत जनजा त के सदस्य की आय [धारा १० (२६)]


➔ Income of a “Sikkimese” individual [Section 10(26AAA)]
➔ Income of an Agricultural Produce Marketing Committee/Board [Section 10(26AAB)]
➔ Income of corporation or other body or institution or association established for promoting

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the interest of members of Scheduled Caste, etc. [Section 10(26B)]

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➔ Income of corporation established for promoting interest of minority caste [Section
10(26BB)]

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➔ Income of corporation established for ex-servicemen [Section 10(26BBB)]
➔ Income of a co-operative society formed for promoting the interests of the members of

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Scheduled Castes or Scheduled Tribes [Section 10(27)]
➔ Income of coffee board, rubber board, etc. [Section 10(29A)]

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➔ Subsidy from the Tea Board [Section 10(30)]

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➔ Income of minor [Section 10(32)]
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Under section 64(1A) income of a minor child is clubbed along with the income of his/her
parent, subject to certain conditions.. If the income of an individual includes any income of
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his/her minor child, then such individual can claim exemption (in respect of each minor
child) of lower of following amount:
(a) 1,500 per minor child; or
(b) Amount of income of each minor child (which is clubbed).
एक " सि कमी" व्यि त की आय [धारा 10 (26AAA)]
एक कृ ष उपज वपणन स म त / बोडर्ष की आय [धारा 10 (26AAB)]
अनुसू चत जा त के सदस्यों के हतों को बढ़ावा दे ने के लए स्था पत नगम या अन्य नकाय या संस्था या एसो सएशन की
आय [धारा 10 (26B)]

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अल्पसंख्यक जा त के हत को बढ़ावा दे ने के लए स्था पत नगम की आय [धारा 10 (26BB)]

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पूवर्ष सै नकों के लए स्था पत नगम की आय [धारा 10 (26BBB)]
अनुसू चत जा त या अनुसू चत जनजा त के सदस्यों के हतों को बढ़ावा दे ने के लए ग ठत एक सहकारी स म त की आय

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[धारा १० (२ oper)]
कॉफी बोडर्ष, रबर बोडर्ष, आ द की आय [धारा 10 (29A)]

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टी बोडर्ष से सिब्सडी [धारा 10 (30)]

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नाबा लग की आय [धारा 10 (32)]
धारा 64 (1 ए) के तहत एक नाबा लग बच्चे की आय को उसके माता- पता की आय के साथ जोड़ा जाता है , कुछ शतर्यों के

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अधीन .. य द कसी व्यि त की आय में उसके / उसके नाबा लग बच्चे की कोई आय शा मल है , तो ऐसा व्यि त दावा कर
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सकता है नम्न ल खत रा श के नम्न में से छूट (प्रत्येक नाबा लग बच्चे के संबंध में ):
(ए) 1,500 प्र त नाबा लग बच्चे; या
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(बी) प्रत्येक नाबा लग बच्चे की आय की रा श (िजसे लब कया जाता है )।
Capital gains on transfer of US 64 [Section 10(33)]
As per section 10(33), long-term or short-term capital gains arising on transfer of units of Unit
Scheme, 1964 (US 64) are exempt from tax if the transfer of such aIncome of a shareholder on

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account of buy back of shares by the company [Section 10(34A)]sset takes place on or after
1/04/2002.

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Dividends and interest on units [Section 10(34)/(35)]

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Income of a shareholder on account of buy back of shares by the company [Section 10(34A)]
This exemption is available only in those cases where additional income-tax is payable on

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distributed income under section 115QA by the company opting for buy back of such shares.

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➔ Income of an investor received from a securitisation trust [Section 10(35A)]
➔ Capital gains in case of compulsory acquisition of urban agricultural land [Section 10(37)]
➔ N
Capital gain on transfer of specified capital assets under land pooling scheme of the Andhra
Pradesh Government[section 10(37A)]
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➔ Long-term capital gains on transfer of equity shares or units of an equity oriented mutual fund
or a unit of a business trust covered by securities transaction tax [Section 10(38)]
➔ Income from international sporting event [Section 10(39)]
यूएस 64 के स्थानांतरण पर पूंजीगत लाभ [धारा 10 (33)]
धारा 10 (33) के अनुसार, यू नट स्कीम, 1964 (US 64) की इकाइयों के हस्तांतरण पर उत्पन्न होने वाले
दीघर्षका लक या अल्पका लक पूंजीगत लाभ को कर से मु त कया जाता है , य द शेयरधारक का इस तरह से अंतरण
100 के वापस खरीदने के कारण होता है । कंपनी द्वारा शेयर [धारा १० (३४ ए)] १/२००/२००२ के बाद या उसके बाद शुरू

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होता है ।

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इकाइयों पर लाभांश और ब्याज [धारा 10 (34) / (35)]

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कंपनी द्वारा शेयरों की वापसी के कारण एक शेयरधारक की आय [धारा 10 (34A)]

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यह छूट केवल उन मामलों में उपलब्ध है , जहां कंपनी द्वारा इस तरह के शेयरों को वापस खरीदने का वकल्प दे कर
धारा 115QA के तहत वत रत आय पर अ त र त आयकर दे य है ।

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एक प्र तभू तकरण ट्रस्ट से प्राप्त नवेशक की आय [धारा 10 (35A)]

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शहरी कृ ष भू म के अ नवायर्ष अ धग्रहण के मामले में पूंजीगत लाभ [धारा 10 (37)]
आंध्र प्रदे श सरकार की भू म पू लंग योजना के तहत न दर्ष ष्ट पूंजीगत संप त्ति के हस्तांतरण पर पूंजीगत लाभ [धारा 10
(37 ए)] N
इि वटी शेयरों या इि वटी ओ रएंटेड म्यूचुअल फंड की इकाइयों पर लंबी अव ध के पूंजीगत लाभ या प्र तभू त लेनदे न
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कर द्वारा कवर कए गए व्यापार ट्रस्ट की एक इकाई [धारा 10 (38)]
अंतरार्षष्ट्रीय खेल आयोजन से आय [धारा 10 (39)]
➔ Grants received by specified subsidiary company [Section 10(40)]
➔ section 10(41), any capital gain arising in the above case is not chargeable to tax
➔ Income of certain non-profit body or authority [Section 10(42)]
➔ Loan in the case of reverse mortgage [Section 10(43)]
➔ Income of New Pension System Trust [Section 10(44)]

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income received by any person for, or on behalf of the New Pension System Trust established on
27-2-2008 under the provisions of the Indian Trust Act, 1882 will be exempt from tax.

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➔ Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other

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member/retired member of the UPSC [Section 10(45)]
➔ Exemption of specified income of notified body/ authority/trust/board/commission [Section

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10(46)]
➔ Any income of a notified infrastructure debt fund set-up in accordance with prescribed guidelines

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[Section 10(47)]
➔ Income received by certain foreign companies in Indian currency for import of crude oil etc.
[Section 10(48)] N

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Any income of a foreign company on account of storage and sale of crude oil [Section 10(48A)]
➔ Any income of a foreign company on account of sale of leftover stock of crude oil [Section
10(48B)]
➔ Tax exemption to National Financial Holdings Company Limited [Section 10(49)]
➔ Income subject to equalisation levy [Section 10(50)]
न दर्ष ष्ट सहायक कंपनी द्वारा प्राप्त अनुदान [धारा 10 (40)]
धारा 10 (41), उपरो त मामले में उत्पन्न होने वाला कोई भी पूंजीगत लाभ कर के लए प्रभायर्ष नहीं है
कुछ गैर-लाभकारी नकाय या प्रा धकरण की आय [धारा 10 (42)]
रवसर्ष मॉगर्देज के मामले में ऋण [धारा 10 (43)]

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न्यू पें शन सस्टम ट्रस्ट की आय [धारा 10 (44)]
भारतीय ट्रस्ट अ ध नयम, 1882 के प्रावधानों के तहत 27-2-2008 को स्था पत न्यू पें शन सस्टम ट्रस्ट की ओर से कसी

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भी व्यि त को प्राप्त आय, कर से मु त होगी।

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चेयरमैन / सेवा नवृत्ति अध्यक्ष या यूपीएससी के कसी अन्य सदस्य / सेवा नवृत्ति सदस्य को दया गया कोई भत्तिा या
अनुलाभ [धारा 10 (45)]

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अ धसू चत नकाय / प्रा धकरण / ट्रस्ट / बोडर्ष / आयोग की न दर्ष ष्ट आय की छूट [धारा 10 (46)]
नधार्ष रत दशा- नदर्दे शों [धारा 10 (47)] के अनुसार अ धसू चत अवसंरचना ऋण न ध की कोई आय

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कच्चे तेल आ द के आयात के लए भारतीय मुद्रा में कुछ वदे शी कंप नयों द्वारा प्राप्त आय [धारा 10 (48)]
कच्चे तेल के भंडारण और बक्री के कारण कसी वदे शी कंपनी की कोई आय [धारा 10 (48 ए)]
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कच्चे तेल के बचे हु ए स्टॉक की बक्री के कारण कसी वदे शी कंपनी की कोई आय [धारा 10 (48B)]
नेशनल फाइनें शयल होिल्डंग्स कंपनी ल मटे ड को कर छूट [धारा 10 (49)]
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समान लेवी के अधीन आय [धारा 10 (50)]
Other important exemptions

Apart from above discussed exemption of section 10 following is the list of other important
exemptions:

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Section 10A provides for exemption in respect of income of newly established undertakings in
free trade zone or electronic hardware technology park or electronic software technology park.

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Section 10AA provides for exemption in respect of income of newly established units in Special
Economic Zones.

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Section 11 and 12 provide exemption in respect of income of a public charitable or religious trust.
Section 13A provides exemption in respect of income of a political party.

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Section 13B provides exemption in respect of income of an electoral trust.

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उपरो त महत्वपूणर्ष छूट के अलावा धारा 10 नम्न ल खत अन्य महत्वपूणर्ष छूटों की सूची है :

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धारा 10 ए मु त व्यापार क्षेत्रि या इले ट्रॉ नक हाडर्षवेयर प्रौद्यो गकी पाकर्ष या इले ट्रॉ नक सॉफ्टवेयर प्रौद्यो गकी पाकर्ष में नव
स्था पत उपक्रमों की आय के संबंध में छूट प्रदान करता है ।
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धारा 10 एए वशेष आ थर्षक क्षेत्रिों में नव स्था पत इकाइयों की आय के संबंध में छूट प्रदान करता है ।
धारा 11 और 12 एक सावर्षज नक धमार्षथर्ष या धा मर्षक ट्रस्ट की आय के संबंध में छूट प्रदान करते हैं।
धारा 13 ए राजनी तक दल की आय के संबंध में छूट प्रदान करता है ।
धारा 13 बी एक चुनावी ट्रस्ट की आय के संबंध में छूट प्रदान करता है ।
Clubbing of Income Under Income Tax Act
The intention here is to make sure there is no tax that escapes, in case an

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individual is moving assets or incomes in the family.

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In the case of Assets Transfer to Anyone
Transfer of Income - no transfer of assets: When you retain the ownership of

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an asset but decide to transfer its income by doing an agreement or any

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other way, the Act will still consider that income as your income and it will
be added to your total income for taxation purposes.

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Transfer of Asset - which is revocable: When you transfer the ownership of
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an asset and make such transfer revocable, income from such an asset will
continue to be added to your income.
Clubbing of Spouse's Income
(1) Your spouse receives a salary from a company or a firm in which you have a
substantial interest, then such salary will be clubbed with your income.

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➔ Substantial Interest means you alone or with your relatives (husband, wife, brother,

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sister or your lineal ascendant or descendant) hold equity or voting power of a
company which is 20% or more.

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➔ Or in case of a firm you are entitled to 20% or more of the profits. Also, if both of

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your receive an income from such a firm or company, it will get taxed in the hands
of the person whose taxable income is higher.

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➔ There is one exception to this - if your spouse receives the salary due to his/her
application of technical or professional knowledge & experience then such salary
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will be taxed in the hands of the person receiving it and not clubbed.
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प त या पत्नी की आय का लब
(1) आपके जीवनसाथी को कसी कंपनी या कसी फमर्ष से वेतन मलता है , िजसमें आपकी अच्छी खासी दलचस्पी है , तो इस तरह के वेतन
को आपकी आय में जोड़ा जाएगा।

सब्स्टैं टयल इंटरे स्ट का मतलब है क आप अकेले या अपने रश्तेदारों (प त, पत्नी, भाई, बहन या आपके वंशज या वंशज) के साथ उस
कंपनी की इि वटी या वो टंग पावर रखते हैं जो 20% या उससे अ धक है ।

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या एक फमर्ष के मामले में आप 20% या उससे अ धक लाभ के हकदार हैं। साथ ही, य द आपकी दोनों को ऐसी कसी फमर्ष या कंपनी से आय

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प्राप्त होती है , तो यह उस व्यि त के हाथ में कर लगेगा, िजसकी कर योग्य आय अ धक है ।
इसका एक अपवाद है - य द आपके प त को तकनीकी या व्यावसा यक ज्ञान और अनुभव के आवेदन के कारण वेतन मलता है , तो इस

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तरह के वेतन को प्राप्त करने वाले व्यि त के हाथों में कर दया जाएगा और इसे लब नहीं कया जाएगा।

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2) आप अपने प त या पत्नी को प्रत्यक्ष या अप्रत्यक्ष रूप से पयार्षप्त वचार प्राप्त कए बना एक प रसंप त्ति हस्तांत रत करते हैं (इसमें वह
संप त्ति शा मल नहीं है जहां तलाक के नपटान के हस्से के रूप में स्थानांत रत कया जाता है ) - इस संप त्ति से आय आपकी आय के साथ
दशार्षई जाएगी

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(३) आप कसी व्यि त या व्यि तयों के संघ को, प्रत्यक्ष या परोक्ष रूप से, पयार्षप्त वचार के बना, एक प रसंप त्ति को हस्तांत रत करते हैं,

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ता क लाभ आपके प त या पत्नी को उत्पन्न हो या अब आस्थ गत आधार पर, ऐसी प रसंप त्ति से आय आपके साथ जोड़ दी जाएगी आय।
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(४) ऐसी िस्थ त मान लें क आप अपने जीवनसाथी (जो काम नहीं कर रहे हैं) को पैसे प्रदान करते हैं और उस पैसे को जीवनसाथी द्वारा
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नवेश कया जाता है और एक निश्चत आय उत्पन्न होती है (ऐसे धन से जो आपने अपने प त को दया था)।
उसके द्वारा कए गए ऐसे नवेश से होने वाली आय को आपकी आय में जोड़ा जा सकता है ।
हालां क, य द आपका प त अपनी आय के हस्से को फर से स्था पत करता है और आगे की आय अिजर्षत करता है तो ऐसी आय को आपकी
कर योग्य आय के साथ नहीं जोड़ा जा सकता है ।
2) You transfer an asset to your spouse directly or indirectly without receiving adequate
consideration (does not include where asset is transferred as part of a divorce settlement) - income
from this asset will be clubbed with your income

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(3) You transfer an asset to a person or an association of persons, directly or indirectly, without
adequate consideration, so that the benefit arises to your spouse either now or on a deferred basis,

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income from such an asset will be clubbed with your income.

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(4) Assume a situation where you provide money to your spouse (who is non working) and that
money is invested by the spouse and a certain income is generated (from such money that you

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gave your spouse).
➔ The income that arises from such investment done by her can be clubbed to your income.

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➔ However, if your spouse reinvests the income portion and earns further income then such
income may not be clubbed with your taxable income.
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Clubbing of Income of a Son's Wife

You transfer an asset to your son's wife directly or indirectly without receiving
adequate consideration – income from this asset will be clubbed with your

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income.

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Or you transfer an asset to a person or AOP, for the immediate or deferred

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benefit of your son's wife, without adequate consideration, directly or
indirectly - income from this asset will be clubbed with your income

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एक बेटे की पत्नी की आय की ल बंग

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आप अपने बेटे की पत्नी को प्रत्यक्ष या परोक्ष रूप से पयार्षप्त वचार प्राप्त कए बना एक प रसंप त्ति
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हस्तांत रत करते हैं - इस संप त्ति से आय आपकी आय के साथ लब की जाएगी। या आप अपने बेटे
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की पत्नी को तत्काल या आस्थ गत लाभ के लए कसी व्यि त या एओपी को एक संप त्ति
हस्तांत रत करते हैं, बना पयार्षप्त वचार के, प्रत्यक्ष या अप्रत्यक्ष रूप से - इस संप त्ति से आय
आपकी आय के साथ दशार्षई जाएगी
Clubbing of Income of Minor Child (less than 18 years old)

(1) Some families make fixed deposits in the name of a minor child.
➔ Income of a minor is taxable in the hands of the parent whose total income is

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higher (before including the minor's income).

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➔ If the parents are divorced it is clubbed with the person who is maintaining the

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child.
➔ There is one exception to this rule - if the minor has earned an income because of

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his own manual work, or used his talent or specialized knowledge & experience OR
in case of a minor who is disabled (based on definition of disability in Section 80U)

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and earns an income, such income will not be clubbed.

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(2) When your minor child's income is clubbed to your income - exemption is available
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up to Rs 1500 for each such minor child.
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Which means if clubbed income is more than Rs 1500, Rs 1500 is the maximum
exemption,
however if clubbed income is say Rs 800 (less than Rs 1500) exemption is limited up to
such lesser amount, Rs 800 in this case.
मामूली बच्चे की आय की ल बंग (18 वषर्ष से कम)

(१) कुछ प रवार नाबा लग बच्चे के नाम पर साव ध जमा करते हैं।

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नाबा लग की आय माता- पता के हाथों में कर योग्य है , िजनकी कुल आय अ धक है (नाबा लग की आय को शा मल करने से

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पहले)।
य द माता- पता तलाकशुदा हैं तो इसे उस व्यि त के साथ जोड़ दया जाता है जो बच्चे को पाल रहा है ।

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इस नयम का एक अपवाद है - य द नाबा लग ने अपने स्वयं के मैनुअल काम के कारण आय अिजर्षत की है , या अपनी प्र तभा
या व शष्ट ज्ञान और अनुभव का उपयोग कया है या एक नाबा लग के मामले में अक्षम है (धारा 80 यू में वकलांगता की

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प रभाषा के आधार पर) और एक आय अिजर्षत करता है , ऐसी आय को लब नहीं कया जाएगा।

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(२) जब आपके नाबा लग बच्चे की आय आपकी आय के बराबर हो जाती है - ऐसे प्रत्येक नाबा लग बच्चे के लए १५०० रुपये
तक की छूट उपलब्ध है ।

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िजसका मतलब है क य द लब की आय 1500 रुपये से अ धक है , तो 1500 रुपये अ धकतम छूट है ,
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हालां क अगर लब की आय 800 रुपये (1500 रुपये से कम) है , तो छूट इस तरह की कम रा श, इस मामले में 800 रुपये तक
सी मत है ।
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Clubbing of income provision will not apply to a major child (whether he

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is earning or not). Hence, assume that you transferred Rs.1,00,000 to

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your major child. He invested that into an FD and earned Rs.8,000 as an

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interest income. Such interest income is not your income but it is your

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major child income.

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N
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Agricultural Income Section 2 (1A)
1. Revenue generated through rent or lease of a land in India that is used

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for agricultural purposes

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2. Revenue generated through the commercial sale of produce gained from

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an agricultural land

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3. Revenue generated through the renting or leasing of buildings in and
around the agricultural land subject to the following conditions

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➔ The cultivator or farmer should have occupied the building, either

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through rent or revenue
➔ The building is used as a residential place, storeroom or outhouse
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➔ The agricultural land or the land where the building is located, is being
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assessed for land revenue or subject to a local rate assessed
कृ ष आय अनुभाग 2 (1A)

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भारत में एक भू म के कराए या पट्टे के माध्यम से उत्पन्न राजस्व जो कृ ष प्रयोजनों के लए उपयोग कया जाता है

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कृ ष भू म से प्राप्त उपज की व्यावसा यक बक्री के माध्यम से उत्पन्न राजस्व
नम्न ल खत िस्थ तयों में कृ ष भू म के आसपास और आसपास के भवनों के कराए या पट्टे के माध्यम से उत्पन्न

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राजस्व
कृ षक या कसान को कराए या राजस्व के माध्यम से भवन पर कब्जा करना चा हए था

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भवन का उपयोग आवासीय स्थान, स्टोररूम या आउटहाउस के रूप में कया जाता है
कृ ष भू म या भू म जहां भवन िस्थत है , का आकलन भू राजस्व या स्थानीय दर के अधीन मूल्यांकन कया जा रहा है

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N
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Exclusions:
➔ Revenue from sale of processed produce of agricultural nature without
actual agricultural activity

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➔ Revenue from extremely processed produce

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➔ Revenue from trees that have been sold as timber

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Key points to remember while considering if an income is actually a valid

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agricultural income –
➔ Income should be from an existing piece of land

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➔ Income should be from a piece of land that is used for agricultural
operations N
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➔ Income should stem from produce achieved after cultivation of the land
➔ Income can be from a land that is not under the assessee’s ownership
अपवजर्षन:

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वास्त वक कृ ष ग त व ध के बना कृ ष प्रकृ त के प्रसंस्कृ त उपज की बक्री से राजस्व
अत्यंत प्रसंस्कृ त उपज से राजस्व

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पेड़ों से प्राप्त राजस्व जो लकड़ी के रूप में बेचा गया है

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यह दे खते हु ए क आय वास्तव में एक वैध कृ ष आय है , यह याद रखने के लए महत्वपूणर्ष बंद ु -

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आय भू म के मौजूदा टु कड़े से होनी चा हए
आय भू म के एक टु कड़े से होनी चा हए जो कृ ष कायर्यों के लए उपयोग की जाती है

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भू म की खेती के बाद प्राप्त होने वाली उपज से आमदनी होनी चा हए
आय उस भू म से हो सकती है जो नधार्ष रती के स्वा मत्व में नहीं है
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©
©
N
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au
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©
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au
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Agricultural income is exempt from income tax. However, the Income-tax Act has laid
down a method to indirectly tax such income. This method or concept may be called as
the partial integration of agricultural income with non-agricultural income. It aims at
taxing the non-agricultural income at higher rates of tax.

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Applicability: Individuals, HUFs, AOPs, BOIs and artificial juridical persons have to

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compulsorily calculate their taxable income using this method. Thus Company,
firm/LLP, co-operative society and local authority are excluded from using this method.

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Conditions: This method is applicable when the following conditions are met:

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➔ Net agricultural income is greater than Rs. 5,000 during the year; and
➔ Non-agricultural income is:

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a. Greater than Rs. 2,50,000 for individuals below 60 years of age and all other
applicable persons N
b. Greater than Rs. 3,00,000 for individuals between 60 – 80 years of age
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c. Greater than Rs. 5,00,000 for individuals above 80 years of age
In simple terms, the non-agricultural income should be greater than the maximum
amount not chargeable to tax
कृ ष आय को आयकर से छूट प्राप्त है । हालां क, आयकर अ ध नयम ने अप्रत्यक्ष रूप से ऐसी आय पर कर लगाने की एक
व ध नधार्ष रत की है । इस पद्ध त या अवधारणा को गैर-कृ ष आय के साथ कृ ष आय के आं शक एकीकरण के रूप में कहा
जा सकता है । इसका उद्दे श्य गैर-कृ ष आय को कर की उच्च दरों पर कर दे ना है ।

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प्रयोज्यता: व्यि तयों, एचयूएफ, एओपी, बीओआई और कृ त्रिम न्या यक व्यि तयों को इस पद्ध त का उपयोग करके

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अपनी कर योग्य आय की गणना करना अ नवायर्ष है । इस प्रकार कंपनी, फमर्ष / एलएलपी, सहकारी स म त और स्थानीय
प्रा धकरण को इस पद्ध त का उपयोग करने से बाहर रखा गया है ।

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शतर्तें: यह व ध तब लागू होती है जब नम्न ल खत शतर्तें पूरी होती हैं:

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शुद्ध कृ ष आय रुपये से अ धक है । वषर्ष के दौरान 5,000; तथा
गैर-कृ ष आय है :

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से अ धक रु। 60 वषर्ष से कम आयु के व्यि तयों और अन्य सभी लागू व्यि तयों के लए 2,50,000
से अ धक रु। 60 से 80 वषर्ष की आयु के व्यि तयों के लए 3,00,000

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से अ धक रु। 80 वषर्ष से अ धक आयु के व्यि तयों के लए 5,00,000
सरल शब्दों में , गैर-कृ ष आय कर की अ धकतम रा श से अ धक होनी चा हए
N
©
https://unacademy.com/lesson/income-tax-deduction-80d-in-hindi/DZWNVQKB

Tax Deductions under Section 80C:


Section 80C of the Income Tax Act provides provisions for tax

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deductions on a number of payments,

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Individuals and Hindu Undivided Families eligible for these

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deductions.

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Eligible taxpayers can claim deductions to the tune of Rs 1.5 lakh

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per year under Section 80C, with this amount being a combination
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of deductions available under Sections 80 C + 80 CCC + 80 CCD.
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Some of the popular investments which are eligible for this tax deduction are
mentioned below.

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● Payment made towards life insurance policies (for self, spouse or

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children) (Maturity amount Max 10% of assured amount or on Death

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otherwise Taxable- other sources)
● Payment made towards a superannuation/provident fund

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● Tuition fees paid to educate a maximum of two children ( Formal school,

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college)
● Payments issued towards a fixed deposit with a minimum tenure of 5

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years
N
©
Section Deduction on FY
2018-19

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Section – Investment in PPF ( excluding Unrecognised PF) Rs.

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80C 1,50,000
– Employee’s share of PF contribution

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– NSCs 6 year National Savings Certificates

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– Life Insurance Premium payment (Max 10% of assured amount or on Death

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otherwise Taxable- other sources)

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– Children’s Tuition Fee

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– Principal Repayment of home loan
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– Investment in Sukanya Samridhi Account
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– ULIPS

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– ELSS
– Sum paid to purchase deferred annuity

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– Five year deposit scheme

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– Senior Citizens savings scheme
– Subscription to notified securities/notified deposits scheme

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– Contribution to notified Pension Fund set up by Mutual Fund or UTI.
N
©
– Subscription to Home Loan Account scheme of the National
Housing Bank

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– Repayment of Housing Loan (not interest)

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– Subscription to deposit scheme of a public sector or company

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engaged in providing housing finance

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– Contribution to notified annuity Plan of LIC

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– Subscription to equity shares/ debentures of an approved eligible
issue N
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– Subscription to notified bonds of NABARD
Section Nature of deduction Who can claim

(1) (2) (3)

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80CCC Contributions to certain pension funds of LIC or Individual

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any other insurer (up to Rs. 1,50,000) (subject to

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certain conditions)

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80CCD Contribution to pension scheme notified by Central Individual

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Government up to 10% of salary (subject to certain
conditions and limits)

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Contribution made by employer shall also be
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allowed as deduction under section 80CCD(2)
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while computing total income of the employee.
However, amount of deduction could not exceed
10% of salary of the employee
80CCD(1) Employee’s contribution to NPS account –
(maximum up to Rs 1,50,000)

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80CCD(2) Employer’s contribution to NPS account Maximum up to

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10% of salary

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80CCD(1B) Additional contribution to NPS to NPS Rs. 50,000

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National Pension Scheme Can claim
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Additional deduction Deduction in NPS in
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case of Self Contribution of the Employee
80CCF Amount up to Rs. 20,000, paid or deposited, Individual/HUF

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during the previous years relevant to assessment

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year 2011-12 or 2012-13, as subscription to

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notified long-term infrastructure bonds

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80CCG Rajiv Gandhi Equity Scheme for investments in Individual

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Equities (Resident)

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Lower of N
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– 50% of amount invested in equity shares; or

– Rs 25,000
Section 80D

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➔ This section allows deductions on the health insurance premium paid by

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the taxpayer.

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➔ The limit for the same is INR 25,000 for self, spouse, and children and an

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additional INR 25,000 for parents.
➔ The limit for senior citizens is INR 30,000.

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N
©
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Senior citizens above the age of 80 can seek a deduction of INR 30,000
towards their medical expenditure.

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An amount of INR 5,000 per family can be claimed as preventive health
checkup expenses. However, this is not over and above the individual limits

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specified.

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N
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80D Amount paid (in any mode other than cash) by an individual or HUF Individua
to LIC or other insurer to effect or keep in force an insurance on the l/HUF
health of specified person. An individual can also make payment to

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the Central Government health scheme and/or on account of

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preventive health check-up (subject to limit)

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■ specified person means:
- In case of Individual - self, spouse, dependent children or parents

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- In case of HUF - Any member thereof

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■ Deduction for preventive health check-up shall not exceed in
aggregate Rs. 5,000. N
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■ Payment on account of preventive health check-up may be made
in cash.
Section 80D is amended by the Finance Act, 2018. From assessment year
2019-20 onwards the deduction under Section 80D will be available as per the
limit specified below:

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Individual HUF

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For self, spouse and dependent children : Rs. 25,000 Premium up to Rs. 25,000 (Rs. 50,000 if member
(Rs. 50,000 if person insured is a senior citizen*); insured is a senior citizen) paid to insure any member

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of the family.

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For parents of the assessee : (Additional) Rs. 25,000 NA
(Rs. 50,000 if person insured is a senior citizen)

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Medical expenditure if no amount is paid in respect Medical expenditure if no amount is paid in respect of
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of health insurance-Rs.50,000 (only in case of senior health insurance-Rs.50,000 (only in case of senior
©
citizen) citizen)

Aggregate amount of deduction cannot exceed Aggregate amount of deduction cannot exceed
Rs.1,00,000 in any case Rs.50,000 in any case.
Section 80DD Resident Individual/HUF
An amount of INR 75,000 may be claimed as a deduction for spending on

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medical treatments of dependents with a 40% disability.

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This limit is INR 1.25 lakh in case of severe disability.

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any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any

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other insurer or the Administrator or the specified company for the maintenance of a dependent,

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being a person with disability (subject to certain conditions)

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©

Double Benefit of 80DD and 80U is not available


Section 80DDB Resident Individual/HUF
Under this section, individuals who are below the age of 60 years may

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claim INR 40,000 for the treatment for specified critical ailments for self

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and dependents.

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The same limit is INR 60,000 for senior citizens and

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INR 80,000 for very senior citizens.

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● Maximum deduction is Rs. 40,000 (Rs. 1,00,000 where expenditure is incurred for a senior
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citizen [w.e.f assessment year 2019-20])
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● With effect from assessment year 2016-17, the taxpayer shall be required to obtain a
prescription from a specialist doctor (not necessarily from a doctor working in a
Government hospital) for availing this deduction.
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Section 80U

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This section allows deduction to individuals who are physically and

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mentally challenged.

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N
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80U Deduction of Rs. 75,000 to a resident individual who, at any time Resident
during the previous year, is certified by the medical authority to individuals

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be a person with disability [as defined under Persons with

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Disabilities (Equal Opportunities, Protection of Rights and Full

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Participation) Act, 1995]

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[w.e.f. assessment year 2005-06 including autism, cerebral
palsy, and multiple disabilities as defined under National Trust

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for Welfare of Persons with Autism, Cerebral Palsy, Mental

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Retardation & Multiple Disabilities Act, 1999]
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[in the case of a person with severe disability 80%, allowable
deduction is Rs. 1,25,000] (subject to certain conditions).
80E Amount paid out of income chargeable to tax by Individual

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way of payment of interest on loan taken from

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financial institution/approved charitable institution
for pursuing higher education

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(12+)

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(subject to certain conditions)

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N
(maximum period : 8 years)
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Loan Can be taken for self, spouse, children
Deductions under Section 80G

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Contributions made to certain relief funds and charitable institutions

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can be claimed as a deduction under Section 80G of the Income Tax

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Act.

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All donations are not eligible for deduction under section 80G. Only

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donations made to prescribed funds qualify as a deduction.

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Deduction allowed to all types of tax payers – This deduction can be
claimed by any tax payer -individuals, company, firm or any other
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person.
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Mode of Payment – This deduction can only be claimed when the
contribution has been made via cheque or draft or in cash. But

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deduction is not allowed for donations made in cash exceeding Rs

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10,000. In-kind contributions such as food material, clothes,

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medicines etc do not qualify for deduction under section 80G.

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From Financial Year 2017-18 onwards – Any donations made in
cash exceeding Rs 2000 will not be allowed as deduction. Thus

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the donations above Rs 2000 should be made in any mode other
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than cash to qualify as deduction u/s 80G.
©
Prescribed funds & institutions under Section 80G
Donations with 100% deduction without any qualifying limit:

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● National Defence Fund set up by the Central Government

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● Prime Minister’s National Relief Fund

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● National Foundation for Communal Harmony

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● An approved university/educational institution of National eminence
● Zila Saksharta Samiti constituted in any district under the chairmanship of

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the Collector of that district

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● Fund set up by a State Government for the medical relief to the poor
● National Illness Assistance Fund

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National Blood Transfusion Council or to any State Blood Transfusion
©
Council
● National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities
● National Sports Fund

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● National Cultural Fund
● Fund for Technology Development and Application

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● National Children’s Fund

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● Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund

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with respect to any State or Union Territory
● the Army Central Welfare Fund or the Indian Naval Benevolent

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Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief
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Minister’s Cyclone Relief Fund, 1996
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● The Maharashtra Chief Minister’s Relief Fund during October 1, 1993
and October 6, 1993
● Chief Minister’s Earthquake Relief Fund, Maharashtra

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● Any fund set up by the State Government of Gujarat exclusively for
providing relief to the victims of earthquake in Gujarat

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● Any trust, institution or fund to which Section 80G(5C) applies for

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providing relief to the victims of earthquake in Gujarat (contribution

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made during January 26, 2001 and September 30, 2001) or
● Prime Minister’s Armenia Earthquake Relief Fund

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● Africa (Public Contributions – India) Fund

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Swachh Bharat Kosh (applicable from FY 2014-15)
©
● Clean Ganga Fund (applicable from FY 2014-15)
● National Fund for Control of Drug Abuse (applicable from FY 2015-16)
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Donations with 50% deduction without any qualifying limit:

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● Jawaharlal Nehru Memorial Fund
● Prime Minister’s Drought Relief Fund

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● Indira Gandhi Memorial Trust

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● Rajiv Gandhi Foundation

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N
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Donations to the following are eligible for 100% deduction subject to
10% of adjusted gross total income:

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➔ Government or any approved local authority, institution or

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association to be utilised for the purpose of promoting family

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planning
➔ Donation by a Company to the Indian Olympic Association or to

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any other notified association or institution established in India

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for the development of infrastructure for sports and games in
India or the sponsorship of sports and games in India.
N
©
Donations to the following are eligible for 50% deduction subject to 10%
of adjusted gross total income:

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➔ Any other fund or any institution which satisfies conditions

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mentioned in Section 80G(5)

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➔ Government or any local authority to be utilised for any charitable
purpose other than the purpose of promoting family planning

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➔ Any authority constituted in India for the purpose of dealing with

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and satisfying the need for housing accommodation or for the
purpose of planning, development or improvement of cities, towns,

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villages or both
➔ N
Any corporation referred in Section 10(26BB) for promoting interest
©
of minority community
➔ For repairs or renovation of any notified temple, mosque,
gurudwara, church or other place.
Adjusted total income: Adjusted gross total income is the gross total
income (sum of income under all heads) less the following:

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➔ Amount deductible under Sections 80CCC to 80U (but not Section

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80G)

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➔ Exempt income

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Long-term capital gains
➔ Income referred to in Sections 115A, 115AB, 115AC, 115AD and

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115D, relating to non-residents and foreign companies
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Section 80GGA

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Section 80GGA allows deductions for donations made towards

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scientific research or rural development. This deduction is allowed

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to all assessees except those who have income (or loss) from

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business and profession.

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Mode of payment – Donations can be made in cheque or by draft or
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in cash; however cash donations in excess of Rs 10,000 are not
allowed as a deduction.
©
100% of the amount that is donated or contributed is considered eligible for
deduction.
Eligible donations under Section 80GGA:

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● Sum paid to a research association which undertakes scientific research, or
sum paid to a college, university or any other institution to be used for

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scientific research and these are all approved by the prescribed authority

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under section 35(1)(ii)
● Sum paid to a research association which undertakes research in social

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science or statistical research or sum paid to a college, university or any other

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institution to be used for the same purpose and these are all approved by the
prescribed authority under section 35(1)(iii)
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● Sum paid to approved association or institution which undertakes any
©
program of rural development and is approved under section 35CCA
● Sum paid to an approved association or institution which

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undertakes trainings of persons for implementing programs of

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rural development

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● Sum paid to a public sector company, local authority or an

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approved association or institution which carries out project or

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scheme approved under section 35AC.
● Sum paid to notified Rural Development Fund

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● Sum paid to notified Fund for Afforestation
● N
Sum paid to notified National Poverty Eradication Fund
©
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If a deduction has been allowed under section 80GGA, such
expenses shall not be deductible under any other provision of the

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income tax act.

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N
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Section 80GG Deduction for Rent Paid

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● You are self employed or salaried

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● You have not received HRA at any time during the year for which you are
claiming 80GG

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● You or your spouse or your minor child or HUF of which you are a member – do

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not own any residential accommodation at the place where you currently reside,
perform duties of office, or employment or carry on business or profession.

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● In case you own any residential property at any place, for which your Income
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from house Property is calculated under applicable sections (as a self occupied
©
property), no deduction under section 80GG is allowed.
You will be required to file Form 10BA with details of payment of rent.
Deduction –the lowest of these will be considered as the deduction
under this section-

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(a) Rs 5,000 per month

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(b) 25% of total Income (income to exclude long term capital gain, short

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term capital gain under section 111A and Income under section 115A or

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115D and deductions 80C to 80U. Also income is before making
deduction under section 80GG).

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(c) Actual Rent less 10% of Income (income to exclude long term
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capital gain, short term capital gain under section 111A and Income
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under section 115A or 115D and deductions 80C to 80U. Also income is
before making deduction under section 80GG).
80GGB Sum contributed to any Indian company
political party/electoral
trust

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au
80GGC Sum contributed to any All assessees, other than local authority and artificial

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political party/electoral juridical person wholly or partly funded by Government

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trust

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100% deduction

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➔ These donations can be done through any recorded mode other
than cash as long as the political party is registered under the
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section 29A of the People Act, 1951.
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80JJA Entire income from business of collecting and All

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processing or treating of bio-degradable waste for assessees

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generating power, or producing bio-fertilizers,

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bio-pesticides or other biological agents or for
producing bio-gas, making pellets or briquettes for

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fuel or organic manure

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100%
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(for 5 consecutive assessment years)
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80QQB Royalty income of author of certain specified category of books (up to Rs. Resident

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3,00,000) (subject to certain conditions) Individual -

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Author

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80RRB Royalty on patents up to Rs. 3,00,000 in the case of a resident individual Resident

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who is a patentee and is in receipt of income by way of royalty in respect individuals
of a patent registered on or after 1-4-2003 (subject to certain conditions).

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80QQB
Under section 80QQB of the income tax act, authors can claim deduction on royalty income earned by

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them.

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Deduction allowed is lower of –

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Rs 3,00,000

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OR

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Gross Income (as calculated below)

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Gross Income of the author includes any income derived by exercise of author’s profession, lump sum
consideration for assignment (or grant) of any of her interests in the copyright of the book, or of royalty or
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copyright fees for author’s book. Includes advance payment on account of such royalties or copyright
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fees, which is not returnable.
Conditions to avail deduction under section 80QQB –

● Taxpayer is an individual resident or resident but not ordinarily

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au
resident in India (may be an Indian citizen or a foreign citizen)

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● Taxpayer is an author or has co-authored.
● The book authored is work of literary, artistic or scientific nature.

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Books do not include, brochures, commentaries, diaries, guides,

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journals, magazines, newspapers, pamphlets, textbooks for school,

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tract and other similar publications.
● The taxpayer must seek a certificate in Form 10CCD from the person
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responsible for making the payment to the taxpayer. This certificate
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must be kept safely by the author, should the assessing officer ask
for it.
● Deduction can only be claimed by filing an income tax return.

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● Where income of the author is not a lump sum payment, 15% of the

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value of books sold in the year (before allowing any expenses) shall

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be ignored

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● If income is earned outside India, the deduction is allowed on
income when it is brought to India within 6 months from the end of

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the year or within the period defined by RBI or other competent

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authority for this purpose. Taxpayer must also obtain a certificate in
Form 10H. N
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80RRB Deductions on Income by way of Lower of Rs 3,00,000 or

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au
Royalty of a Patent income received

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Section 80TTA provides a deduction of Rs 10,000 on interest income. This
deduction is available to an Individual and HUF.
This deduction is allowed on interest earned –

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au
● From a savings account with a bank
● From a savings account with a co-operative society carrying on the

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business of banking

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● From a savings account with a post office

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This deduction is NOT allowed on interest earned on time deposits. Time

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deposits mean deposits repayable on expiry of fixed periods. It shall not
be allowed for – N
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● Interest from fixed deposits
● Interest from recurring deposits
● Any other time deposits
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au
Maximum Deduction – The maximum deduction is limited to Rs 10,000. If

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your interest income is less than Rs 10,000, the entire interest income will be

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your deduction. If your interest income is more than Rs 10,000, your
deduction shall be limited to Rs 10,000. (You have to consider your total

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interest income from all banks where you have accounts).

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Section 80 TTB: Deduction of Interest on Deposits for Senior
Citizens

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au
A new section 80TTB has been inserted vide Budget 2018 wherein, a

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deduction in respect of interest income from deposits held by

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senior citizens will be allowed as a deduction from the total income
The limit for this deduction is Rs. 50,000. Further, no deduction

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under section 80TTA shall be allowed. In addition to section 80 TTB,

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section 194A of the Act will also be amended so as to increase the
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threshold limit for deduction of tax at source on interest income
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payable to senior citizens from the existing limit Rs 10,000 to Rs.
50,000.