Income Tax Rules 2025 : Today we will discuss five such incomes that are absolutely exempt from tax. One of such exceptions comes under the heading that indicates income from agriculture is completely exempt under section 10(1) of the Income Tax Act.
State under section 10(1) of the Income Tax Act: The income from agriculture is wholly exempt from income tax. Such income includes production, processing, and distribution of wheat, rice, pulses, and fruits. Rent received from agricultural land, if this land was used for agricultural operations, would also be exempt. Also, it would benefit farmers, as income from the sale and purchase of agricultural land would not be taxable. Income from agriculture.
Section 10 (1) of Income Tax fully exempts income from agriculture. This includes production, processing, and distribution of wheat, rice, pulses, and fruits. Apart from this if property is used for agricultural work, then even rent received from that will be exempted from tax. Not only this, but income from the purchase and sale of agricultural land is also exempt from tax.
Gift Received From Relatives
Gifts received from close relatives and relatives are not taxable. These relatives include husband and wife, siblings, siblings of husband or wife, siblings of parents (i.e., aunt, uncle), grandparents, maternal grandparents, and spouses of siblings. The gifts from these people are outside the ambit of tax, thereby encouraging family bonding and love.
Furthermore, gifts given on account of marriage are not taxable irrespective of the amount. A gift given by a friend or acquaintance to you up to Rs 50,000 is not taxable, but if he gifts more than this, it will become taxable.
Income From Gratuity
The gratuity after the death or retirement of a government employee is completely tax-free. However, the private sector employees under the Gratuity Payment Act 1972, do not have to pay tax on retirement gratuity of up to Rs 20 lakh.
Scholarship
Tax free scholarships are available for students in all institutions for completing the course. Also, there is voluntary retirement amount that is tax free up to Rs 5 lakhs, which generally helps students and employees in future planning.
Some pensions Also Qualify For Being Tax Free
Winners of gallantry awards like Mahavir Chakra, Paramvir Chakra, Vir Chakra do not have to pay any tax on pensions received. The pension of the family members of Indian Armed Forces is also tax-free.
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