Income Exempted under section 10 (U/S 10) of Income Tax Act 1961

Section 10 of Income tax Act is related to incomes which are totally exempted from tax, so in computing the total income of any previous year of any person, any income falling within any of the following clauses shall be exempted:

1. Agricultural Income [Section 10 (1)]:-

   Agricultural income from land situated in India is fully exempted.

2. Any sum received by a Co-parcener from Hindu Undivided Family (H.U.F) [Section 10 (2)]:-

   Any sum received by an individual as a member of a Hindu Undivided Family, where such sum has been paid out of the income of the family, or in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family is fully exempted. This is subject to the provision of section 64 (2)

3. Share of Income from the Firm [ Section 10 (2A)]:-

In case of a person being a partner of a firm, which is separately assessed as such, his share in the total income of the firm shall be fully exempted. The share of partner in the total income of the firm shall be in same proportion as is given in the partnership deed.   

4. Perquisites and allowance paid by government to its employees serving outside India [Section 10(7)]:

All the perquisites and allowance paid by the government to its employees for services rendered outside India are exempt from tax. This exemption is allowed only to such employees of the Government who are citizen of India.

5. Compensation received in case of any disaster [Section 10(10BC)]:

In case an individual or his legal heir receives any compensation on account of any disaster from central or state government or from a local authority, the same shall be exempted.

6. Payment from Statutory Provident fund [Section 10(11)]:

Any amount withdrawn from the statutory provident fund is exempt from tax. This provision is applicable on Public Provident Fund also (PPF).

7. Payment received from Sukanya Samridhi Account [Section 10(11A)]:

Any payment from an account opened in accordance with Sukanya Samridhi Account rules- 2014 shall be exempted.

8. Transport Allowance:

 Transport allowance granted to employees for commuting between home and office is exempt, subject to a maximum limit of Rs1,600 per month.

9. Scholarship [Section 10(16)]:

The full amount of scholarship granted to meet the cost of education is exempted.

10. Awards instituted by Government [Section 10(17A)]:

Any payment made whether in cash or kind under any awards instituted in the public interest by the central or state government or instituted by any other body and approved by the central government in this behalf shall be fully exempted.

11. House rent allowance [Section 10(13A)]:

Any amount of HRA received by the employee from his employer is exempted up to the least of the following limits:

                        (i) Actual amount of House Rent Allowance received.

                        (ii) 50% of [basic salary + DA] for those living in Delhi, Mumbai, Chennai, Kolkata                                      or 40% of [basic salary + DA] for those living in other cities

                       (iii) Excess of actual rent paid over 10% of salary

12. New Pension System Trust [Section 10(44)]:

Any income received by any person for, or on behalf of the New Pension System Trust established on 27th February, 2008 shall be exempted.

13. Income by way of dividend from Indian company [Section 10(34)]:

This section includes exemption from the dividends that you receive by investing in an Indian company, however the exemption limit is up to Rs 10,000 exceeding which you need to pay tax.