Income Tax News: The government’s primary source of funding is income tax, which is levied on people’ wages. This emphasises how income tax covers a wide range of income, including interest from savings accounts, income from home companies, side gigs, capital gains, and other sources.
Provident Fund Contributions
But even in this vast tax landscape, some forms of income are exempt. Section 10 of the Income Tax Law describes some types of income that are free from taxes, according to tax professionals. Here, we explore seven of these sources where no taxes of any kind are due.
Provident Fund
According to Section 80C of the Income Tax Act, contributions made to your Provident Fund (PF) account are free from taxes. There is a catch, though: the contribution can’t be more than 12% of your base pay. Any amount over this cap that is not used for other purposes is taxable.
Returns from mutual funds or shares of equities
Under Long-Term Capital Gains (LTCG), profits from shares or equities mutual funds up to Rs 1 lakh are tax-free. But if the returns are more than one lakh, the extra sum is subject to LTCG tax.
Gifts for Special Occasions
Tax exemptions apply to gifts given at weddings and other special occasions. But there’s a catch: the present must be received as soon as possible on the day of the wedding and its total worth cannot be more than Rs 50,000. Gifts that exceed this cap are subject to taxes.
Property Inherited or Bequeathed
Taxes do not apply to money, jewellery, or property inherited through wills or inheritance (from parents or grandparents). Future profits or interest from these assets, however, will be taxed according to your applicable tax bracket.
Interest on savings accounts up to Rs 10000
Under Section 80TTA of Income Tax, interest from your savings account is tax-free up to Rs 10,000 each year. Interest earned beyond this cap is subject to taxation.
Money received from VRS
During this time, individuals who choose the Voluntary Retirement Scheme (VRS) can get up to Rs 5 lakh in tax-free money. It’s important to remember that this clause only applies to PSU or government employees—private sector workers are not covered by it.
Income from Agriculture
Revenue derived from agricultural pursuits, such as farming, crop production, and rental income, is fully exempt from taxes. Furthermore, there is no tax on income received from building an agricultural farm.
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