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[]

How useful was this post?

Click on a star to rate it!

Average rating 5 / 5. Vote count: 1

No votes so far! Be the first to rate this post.

Please share your feedback about this post!

Sharing feedback will help us improve our content. Tell us how!

If you want to keep your feedback confidential, please mention it in your feedback. If you have a question, please ask us in the comments or Ask Nyaaya sections.



October 20, 2023

Thank you for this informative article! I’m always on the lookout for valuable insights and updates in the field . Your blog consistently provides clear and practical guidance, which is tremendously helpful to professionals like me. Keep up the great work, and I look forward to more expert advice in the future


October 26, 2023

Thank you so much!

Leave a Reply

Your email address will not be published. Required fields are marked *

Have a question you want to ask our legal experts?

Related Resources

What is Income Tax?

Income tax is a tax levied by the Government of India on the income of every person. The Income Tax Act, 1961 deals with it.

Income Tax Returns or Forms (ITR)

An Income Tax Return (ITR) is a form through which the details of income earned and taxes paid are communicated to the Income Tax Department.

Calculating Taxable Income

For calculating income tax, Income Tax Department taxes you based on your income from different categories.

Deductions Reduced from Tax

A deduction is an expense that is subtracted from an individual’s gross total income to reduce the amount which is going to be taxed.

Time Limit for filing Tax Returns

This post talks about time limit for filing income tax returns and where exceptions are allowed by tax authorities.

Authorities under Income Tax Law

The income tax law establishes various income tax authorities, including the governing body and income tax officers.