Non Taxable income: Every person who pays income tax is always looking for ways to save tax. For this, many schemes are invested. But did you know that you don’t have to pay tax on these 5 types of income? This is very important for the purpose of saving ITR.
Every taxpayer has to pay tax on the income derived from his business or employment. This tax is levied on a percentage of his income limit. But income tax also has provisions for non-taxable income. They are excluded from the ambit of income tax.
Under the Income Tax Act, 1961, income derived from agriculture is excluded from the ambit of income tax. Hindu undivided family income, income from immovable property or income from ancestral property are not taxed.
As per Section 56(ii) of the Income Tax Act, gifts including property, jewellery, money etc. given by a relative are exempt from tax. However, gift received from a person other than a relative is exempted only upto Rs.50 thousand.
The amount of gratuity received after the death or retirement of a government employee is completely tax free. Similarly, private sector employees get exemption on gratuity amount up to Rs 10 lakh received on account of retirement or disability. As per the Income Tax Act, tax relief on gratuity also depends on other factors.
Under Income Tax Act 10(15) certain interest on certain income is exempt from tax. This includes the interest earned on the Suvarna Vaoda Yojana, Local Authority and Infrastructure Bonds and the interest earned under the Sukanya Samriddhi Yojana. No tax is levied on it.