Trusts formed for charitable or religious purposes which are intended to provide relief to poor, education, yoga or for advancement of any object of general public utility are allowed various benefits under the Income Tax Act, like tax exemption under section 11.

Income exempt from Income Tax

Last updated on Jun 7, 2022

Exemptions are those incomes which are exempt from tax. In other words, they do not form a part of the total income calculated for taxation purposes.

Incomes Exempt from Tax

Given below are some examples of income that are exempted from tax:

  • Agricultural income1
  • Any payments received from family income or income of an estate belonging to the family by an individual member of a Hindu Undivided Family2
  • Share of profit from a firm3
  • Leave travel concession provided by an employer to his employee who is an Indian citizen
  • Remuneration received by foreign diplomats4
  • Death-cum-retirement gratuity5
  • Retrenchment compensation6
  • Scholarship granted to meet the cost of education7
  • Family pension received by families of Armed Forces8
  • Foreign allowance granted by the  Government of India to its employees posted abroad9
  • Tax paid on behalf of foreign companies in India10
  • Income of mutual fund set up by a public sector bank or financial institution11
  • Compensation received by victims of Bhopal Gas Tragedy12
  • Any sum of money from a life insurance policy. This includes bonuses but does not cover Keyman insurance policies13
  • Daily allowance of Member of Parliament or State Legislature14
  • Any income from an approved research association15

Further, apart from the ones listed above, there are multiple exemptions under income tax law. To read more click here.

Some institutions are also exempt from giving tax such as India Wildlife Conservation Trust, charitable organizations etc. Read here to see more on exempted institutions.

  1. Section 10(1), Income Tax Act, 1961[]
  2. Section 10(2), Income Tax Act, 1961[]
  3. Section 10(2A), Income Tax Act, 1961[]
  4. Section 10(6), Income Tax Act, 1961[]
  5. Section 10(10), Income Tax Act, 1961[]
  6. Section 10(10B), Income Tax Act, 1961[]
  7. Section 10(16), Income Tax Act, 1961[]
  8. Section 10(19), Income Tax Act, 1961[]
  9. Section 10(7), Income Tax Act, 1961[]
  10. Section 10(6A), Income Tax Act, 1961[]
  11. Section 10(23D), Income Tax Act, 1961[]
  12. Section 10(10BB), Income Tax Act, 1961[]
  13. Section 10(10D), Income Tax Act, 1961[]
  14. Section 10(17), Income Tax Act, 1961[]
  15. Section 10(22B), Income Tax Act, 1961[]

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