If you also pay tax, then reading this news is very important for you. Actually, a new update is coming from the government regarding tax. Due to which now not a single rupee tax will have to be paid on these 10 types of income.
Income Tax is levied on your entire income. This does not only include salary. Apart from salary, many things like interest coming from savings, earning from home, side business, capital gains are included in this. But there are some sources from where the income does not come under the purview of tax.
Apart from the income from agriculture, there are many other incomes which have been kept out of the tax net. According to tax experts, Section 10 of the Income Tax Act mentions about such tax-exempt income. There are certain incomes on which you do not have to pay any tax. Let us tell you about such income on which tax can be saved.
Amount deposited in EPF-
Income tax exemption is available under Section 80C of the Income Tax Act on the amount deposited on your behalf in the PF account. Tax exemption is also available on the amount deposited by the employer in your EPF account. The condition in this is that this amount should not exceed 12% of your Basic Salary. If the amount is more than this, then you will have to pay income tax on the remaining amount.
Returns of up to one lakh rupees received from shares or equity mutual funds-
If you have invested in Shares or Equity Mutual Fund, then after selling them after one year, the return of up to one lakh rupees is tax free. This return is calculated under LTCG. In last year’s budget, LTCG tax has been imposed on returns of more than Rs 1 lakh from investment in shares or equity mutual funds.
Gifts received in marriage-
If a gift is received from friends or relatives in marriage, then tax is not to be paid on it. The condition in this is that you got the gift around your wedding. If your marriage is on March 16 and the gift is given after six months, then there will be no income tax exemption on it. Also, the value of the gift should not exceed Rs 50,000.
Interest on savings account-
If you get interest of up to Rs 10,000 in a year from your bank’s savings account, then under section 80TTA of the Income Tax Act, you get exemption from income tax on it. If the interest on the savings account is more than Rs 10,000 per annum, then you will have to pay income tax on the excess amount.
Profit from partnership firm-
If you are a partner in a firm, then the amount received as Share of Profit is exempt from income tax liability. In fact your partnership firm already pays tax on it. The income tax exemption is only on the profits of the firm and not on the salary you get.
Amount received on life insurance claim or maturity-
If you have bought a life insurance policy, then the amount received on your behalf while claiming it or on its maturity is completely free from Income Tax. The condition is that the annual premium of your life insurance policy should not exceed 10% of its sum assured.
If the premium in life insurance policy is more than this, then you will have to pay income tax on the excess amount. If you have taken a life insurance policy for a person with a disability or a critical illness in your family, then the premium amount can be up to 15% of the sum assured.
Amount received in VRS-
Many people take Voluntary Retirement (VRS) from the job. If you have also taken VRS, then the amount received up to Rs 5 lakh is free from Income Tax. This facility is only for the employees working in Government or PSU (Public Sector Companies) and not for the working people in the private sector.
Property received by inheritance or will
If you have also inherited property, jewelry or cash from your parents, then you do not have to pay income tax on it. If someone made a will in your name and you have received property or cash from him, you do not have to pay income tax on it. You will have to pay tax on future income or interest income from such property as per your tax slab.
Agricultural income
If you have agricultural land and you are earning from farming or related activities, then you do not have to pay any income tax on that income. Agricultural income also includes the yield from it, the amount received in the form of rent etc. If you do farming by building an agricultural farm, then the income from it is also free from Income Tax.
The cost of feeding and feeding in business-
If you are a businessman then you have to meet many types of people during your business. This includes customers, vendors and other employees. The cost of feeding them is also included in the process of business. You should keep a bill for such expenses and treat the same as business expenses. If you follow this process, you can save Income Tax on this amount.
