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Presented By: Ankita Shukla LL.M.3rd Sem Roll No. 04

Submitted to: Ms. Padma Faculty of Law

Introduction Meaning of Exemption Income not included in total income: Section 10 Analysis Conclusion

Chapter III of the Income-tax Act, 1961 deals with the

Incomes which do not form part of total income i.e. incomes which are exempted from inclusion for purposes of tax calculation.

This Chapter covers sections 10 to 13A

Meaning of Exemption
Exemption means 'a part of your income that
you do not have to pay tax on.

-Oxford Dictionary


Section 10(1) Agricultural Income

Agricultural Income is exempt from tax if it comes within the definition of agricultural income as given in Section 2(1A)

Section 10(2) Any Sum Received from HUF

Any sum received by an individual, as a member of HUF, either out of the income of the family or out of income of the estate belonging to the family is exempt from tax.

Section 10(2A) Share of Profit from the Partnership Firm

In the case of a person being a partner of a firm which is separately
assessed as such, his share in the total income of the firm.

Section 10(7) Foreign Allowance

Any allowance allowed or paid outside India to an Indian citizen
is wholly exempted.

Section 10(5) Leave Travel concession

This clause exempts the value of any travel concession received
by the employee.

Section 10(10D) Sum Received Under Life Insurance Policy

This clause exempts any sum received under a life insurance
policy, including bonus on such a policy.

Section 10(16) Scholarships

This clause exempts scholarships granted to meet the cost of education.

Section 10(17)
Daily Allowance of Members of Parliament
Any income by way of daily allowance received by MP or of State Legislatures is exempted from tax.

Section 10(19) Family pension received by family members of armed forces

exemption under this clause is applicable only if these conditions are satisfied:
Family pension is received by the widow (or children or

nominated heirs) of a member of armed forces(including Paramilitary forces) of the union.

The death of such

member has occurred in the course of

operational duties.

Section 10(37)
Capital gain on compulsory acquisition of

urban agricultural land

Any capital gain arising is not chargeable to tax if such

compensation is received after March 31,2004 and the land

was being used for agriculture purpose during 2 years immediately prior to transfer.

Section 10(38)
Long-term capital gains on transfer of equity

shares/units in cases covered by securities

transaction tax.
Long-term capital gains arising on transfer of equity/units
is not chargeable to tax if such transaction is covered by securities transaction tax.

Section 10(39)
Income from any international sporting event
Income arising from a notified international sporting event is exempt from tax from the assessment year 2006-07 if such event is approved by the international


Exemptions are given in the IT Act 1961 which are the
thrust areas of the Government i.e. areas where government wishes to boost growth so as to get strength in the desired field.

In sum up, it can be said that income falling within any of
these categories shall not be included in the computation of the total income of a previous year of any person.