New Delhi: It is that time of the 12 months once more when individuals are prepared for submitting Income Tax Return (ITR), the annual ritual by people and different class of taxpayers.
While the Income Tax division has laid out all the particular guidelines pertaining to ITR as per the Income Tax Act, there are a couple of sorts of incomes which are exempt from the scope of Income Tax. Such sort of incomes are often called tax-free incomes.
Here’s 5 major sources of income that are tax free in India
Gift obtained from relations
Gift obtained from relations are exempt from tax by advantage of Section 56. The following might be thought-about as relative for the aim of claiming such exemption.
(a) Spouse of the person;
(b) Brother or sister of the person;
(c) Brother or sister of the partner of the person;
(d) Brother or sister of both of the mother and father of the person;
(e) Any lineal ascendant or descendent of the person;
(f) Any lineal ascendant or descendent of the partner of the person;
(g) Spouse of the individuals referred to in (b) to (f).
Agricultural income
Agricultural income isn’t taxable in the nation. However, when you’ve got non-agricultural income too, then whereas calculating tax on non-agricultural income, your agricultural income might be taken under consideration for price function. Even when you’ve got solely agricultural income, you are suggested to take care of some proof of your agricultural earnings/bills.
Provident fund
Employee Provident Fund (EPF) presents tax-free returns for these staff who’ve had an lively contribution for greater than 5 years in his/her job. This is relevant even when the particular person has modified a number of organisations/employers in these 5 years.
Scholarships
Income earned on scholarship is tax free below sec 56(ii) of the Income Tax Act.
Salary Components
Chunks of your wage element that comes below reimbursement like transport allowance, meal coupons, cell phone payments, web payments, books and periodicals, go away journey allowance, go away journey concession and many others is tax exempted.
It could also be famous that the Central Board of Direct Taxes (CBDT) has already notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2021-22 (FY 2020-21). There isn’t any change in the way of submitting of ITR Forms as in comparison with final 12 months.
This 12 months, taxpayers are required to submit the returns for the 2020-21 monetary 12 months and the evaluation 12 months can be AY 2021-22.
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