Income Tax News: 5 Types of Income Exempt from Tax in India, Check Before Filing Your ITR

Income Tax News: Everyone prioritises saving money on taxes when it comes to managing their finances. Some sources of income are inherently free from taxes, even though many people look into different ways to lower their tax obligations. Although sometimes overlooked, these exemptions can result in substantial tax savings. Now let's explore a few lesser-known, income-tax-free sources of income.

Inherited Assets

One benefit of inheriting money, jewellery, or property from parents is that there are no taxes to pay. The value or assets obtained as inheritance are not taxed, regardless of how they were received—through a will or a direct transfer. Nevertheless, any rental or interest income received from these inherited assets will be taxed.

Wedding Gifts

Weddings can provide opportunities for tax savings in addition to being joyous occasions. During the wedding rituals, any presents from friends or family are not subject to taxes. But only if the gifts are given around the time of the wedding is this exemption applicable. If gifts are received after this period, they may be subject to tax if their value exceeds Rs 50,000.

Partnership Profits

The profits you receive as a partner in a business are free from taxes. This is due to the fact that the company has already paid taxes on those earnings. But keep in mind that the salary you receive from the company is still taxable, and this exemption only covers partnership earnings.

Tax-Free Maturity

Purchasing life insurance provides tax advantages in addition to future security. A life insurance policy's claim or maturity amount is totally tax-free. There is a restriction, though: the yearly premium cannot be more than 10% of the amount guaranteed. Taxation may be applied to any excess premium amount, though certain plans have a larger exemption level of up to 15 percent.

Capital Gains

Purchasing stocks or equities mutual funds might be a very profitable way to reduce your taxes. Under Long Term Capital Gains (LTCG), returns from selling these investments up to Rs 1 lakh are tax-free. But returns beyond this amount will be subject to LTCG tax. To properly optimise tax savings, you must maintain track of your investment profits.