IT- Exempt Incomes


Section	Type of assessee	Type of income	Exempt amount	Remarks
10(1)	All assessees	Agricultural income.	No limit	See definition – S. 2(1A). Income derived from any land or building for any purpose other than agriculure would be taxable.
10(2)	Member of HUF	Sum paid out of income of family or income of impartible estate.	No limit	Subject to the provision of S. 64(2).
10(2A)	A person being a partner of a firm	Share in the total income of the firm separately assessed as a firm.	No limit	For share of the partner see explanation to this sub-section.
10(4)(i)	Non-resident	Interest on specified securities or bonds.	No limit	No securities or bonds to be specified on or after 1-6-2002. For specified securities see Notification No. SO-3331, dated 19-10-1965.
10(4)(ii)	Individual, being resident outside India under FERA permitted by RBI to maintain NRE account	Interest from NRE account.	No limit	The exemption which was withdrawn from 1st April, 2005 has been restored.
10(4B)	Non-resident being a citizen of India or a person of Indian origin	Interest on specified saving certificate issued before 1-6-2002 subscribed in foreign currency.	No limit	—
10(7)	Citizen of India	Allowances or perquisites by Government for services rendered outside India.	No limit	—
10(10BC)	Individual or his legal heir	Compensation from Central Government, State Government or Local authorities on account of any disaster.	No limit	Exemption not allowed on the amount allowed as deduction under any other section under the Income-tax Act on account of loss or damage caused by such disaster.
10(10D)	All assessees	Any sum received under a life insurance policy including bonus.	No limit	The following amount shall not be exempt : 1. Amount received from an insurance company on death of dependent being a person with disability in respect of an insurance policy issued to him for the maintenance of such dependent. 2. Amount received under a Keyman Insurance Policy (For definition of “Keyman Insurance Policy" refer to explanation to this sub-section.) 3. Sum received under an insurance policy issued on or after 1-4-2003, where premium payable for any of the years exceeds 20% of the actual capital sum assured unless such sum is received on death of a person.
10(11)	All assessees	Payments from a statutory P.F. or public P.F.or from notified P.F.	No limit	For notified P.F., refer Notification No. SO-2430 dated 2-7-1968
10(12)	Salaried employee	Accumulated balances due from recognised Provident Fund	Full amount of accumulated balance	Employee has put in 5 or more years of service or termination of service is due to his ill health or closure of employers business or the balance from recognised P.F. is transferred to another recognised fund.
10(13)	Salaried employee	Payment from approved superannuation fund	Full amount	Payment is on death or on retirement after specified age or his becoming incapacitated prior to such retirement.
10(15)(i)	All assessees	Income by way of interest, premium on redemption or other payment from notified securities, bonds, certificates, etc. issued and notified by Central Government	Limits as specified in the Notification	—
10(15)(iib)	Individual or HUF	Interest on notified capital investment bonds	No limit	No bonds to be specified on or after 1-6-2002.
10(15)(iic)	Individual or HUF	Interest on notified Relief Bonds.	No limit	—
10(15)(iid)	Individual who is NRI at the time of acquisition of the bonds or his successor or the donee	Interest on notified Bonds being NRI Bonds 1988, NRI Bonds (second series) issued by SBI.	No limit	No exemption available in the year of premature encashment.No bonds to be specified on or after 1-6-2002
10(15)(iv)(c)	Non resident	Interest payable by industrial under-taking on money borrowed or debt incurred prior to 1-6-2001 in foreign country in respect of purchase of raw materials, components or plant and machinery and approved by Central Government including usance interest payable outside India by an undertaking engaged in the business of ship breaking in respect of purchase of a ship from outside India.	No limit	—
10(15)(iv)(fa)	NR or NOR	Interest paid by a scheduled bank on RBI approved foreign currency deposits, FCNR and RFC accounts	No limit	The exemption which was withdrawn from 1-4-2005 has been restored.
10(15)(vi)	All assessees	Interest on Gold Deposit Bond Scheme, 1999.	No limit	—
10(15)(vii)	All assessees	Interest on notified bonds issued by a local authority or by a State Pooled Finance Entity	No limit	Ahmedabad notified vide 812(E) dt. 21-8-2001, 364(E) dt. 16-3-2004, 407(E) dt. 24-3-2005, and 333(E) dt. 8-3-2007, Hyderabad notified vide 275(E) dt. 4-3-2002, and 1482(E) dt. 29-12-2003, Nasik notified vide 269(E) dt. 7-3-2003, Tamil Nadu notified vide 545(E) dt. 12-5-2003, Chennai notified vide 392(E) dt. 23-3-2004, 402(E) dt. 23-3-2005 and 408(E) dt. 24-3-2005, Karnataka notified vide 941(E), dt. 20-8-2004, and 729 (E) dt 27-5-2005, Visakhapatnam notified vide 1481(E) dt. 29-12-2003,Nagpur notified vide 10(E) dt. 4-1-2007
10(15)(viii)	NR or NOR	Interest on deposit made on or after 1-4-2005 in an offshore banking unit referred to in Special Economic Zones Act, 2005	—	—
10(16)	Individual	Scholarship granted to meet cost of education.	No limit	—
10(17A)	All assessees	Payment in cash/kind as award instituted by Central/State Government or award instituted by the Central Government approved body	No limit	—
10(18)	Central or State Government employee	Pension.	No limit	Such employee is awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or such other notified gallantry award.
	Any family member of an employee referred above	Family Pension.	No limit	—
10(19)	Widow, children or nominated heir of a member of the armed forces (including paramilitary forces) of the Union	Family Pension.	No limit	Where the death of such member of the armed forceshas occurred in the course of operational duties, in such circumstances and subject to such conditions as may be prescribed.
10(23AAA)	Any person on behalf of employees welfare fund	Any income.	No limit	1. Fund is approved by CIT. 2. The income is applied or accumulated for applica- tion towards objects of the fund only. 3. The funds are invested as permitted u/s. 11(5). 4. The approval shall have effect for 3 years at a time
10(23F)	Approved Venture Capital Fund or Venture Capital Company	Dividend and LTCG in respect of equity shares of a Venture Capital undertaking.	No limit	It shall not apply to investment made after 31-3-1999.
10(23FA)	Same as per S. 10(23F)	Dividend other than referred in Section 115-O and LTCG in respect of equity shares of a venture capital undertaking.	No limit	1. Approved by Central Government. 2. It shall not apply to investment made after 31-3-2000.
10(23FB)	Venture Capital Fund (VCF) or Venture Capital Company (VCC) set up to raise funds for Venture Capital Undertaking (VCU)	Income from investment in VCU	No limit	1. VCF/VCC granted registration under SEBI Act. 2. VCF is operating under a registered trust deed or operating as venture capital scheme of UTI 3. VCF/VCC fulfils conditions specified by SEBI. 4. VCU must be referred to in SEBI (VCF)Regulations, 1996 and notified by CBDT. 5. VCU must be engaged in specified businesses or industries 6. VCU must be domestic company, whose shares are not listed on recognised stock exchange in India
10(32)	Individual — Parent	All income of a minor child which is clubbed.	Up to Rs. 1,500 per minor child	—
10(33)	All assessees	Capital Gain arising on transfer of Unit 64 on or after 1-4-2002.	No limit	—
10(34)	All assessees	Dividends referred to in sec. 115-O.	No limit	—
10(35)	All assessees	• Income in respect of Units of UTI • Income in respect of Units of Mutual of UTI or Mutual Fund Fund specified u/s. 10(23D)	No limit	Does not apply to income arising from transfer of units
10(36)	All assessees	LTCG on transfer of equity shares purchased between 1-3-2003 and 1-3-2004.	No limit	1. Such equity shares should be of a company which is part of BSE-500 Index as on 1-3-2003 or where shares are allotted through public issue after 1-3-2003 and listed on a recognised stock exchange in India before 1-3-2004 2. Transactions of purchase/sale are entered through recognized stock exchanges in India.
10(37) (w.e.f. A.Y.2005-06)	Individual or HUF	Capital gains arising from transfer by way of compulsory acquisition under any law of the agricultural land in urban area referred to in s. 2(14)(iii)(a) or (b) or a transfer the consideration for which is determined or approved by the Central Govt. or the RBI.	No limit	1. Land should have been used for agricultural purposes for at least last 2 years immediately preceding the date of transfer. 2. Exemption applies to compensation/ consideration/additional compensation received on or after 1-4-2004
10(38) (w.e.f. 1-10-2004)	All assessees	LTCG on transfer of equity share in company or a unit of an equity oriented fund where such transaction of sale is entered into on or after 01.10.2004 and is subjected to Securities Transaction Tax (STT).	a No limit	1. For transactions subjected to STT please refer topic on Rates (click here) For definition of equity oriented fund, please refer Explanation to clause (38) 2. LTCG of a company is however includible in computing book profits u/s. 115JB from A.Y. 2007-08
10A	Industrial undertaking in 1. Free Trade Zone (FTZ)	W.e.f. A.Y. 2000-01 income for 10 years from the year of Commercial Production.	100% (90% for A.Y. 2003-04) of the profits from export of the business in proportion to export turnover total turnover	1. Not formed by splitting up or reconstruction of existing business or by transferring used plant and machinery. computed as profits 2. Manufactures/produces articles or things (including computer software) and cutting and polishing of precious and semi-precious stones 3. No deduction u/s. 80-IA, u/s. 80-IB, u/s. 80HH, and u/s. 80HHA in relation to the profits and gains of the industrial undertaking. 4. FTZ/EHTP/STP/SEZ to be notified by Central Government. 5. Deduction shall be allowed only up to A.Y. 2011-12.However, for SEZ unit this limitation does not apply. 6. Report of a Chartered Accountant certifying deduction to be furnished.
	2. Electronic Hardware Technology Park (EHTP) or Software Technology Park (STP) w.e.f. A.Y. 1994-95	W.e.f. A.Y. 2000-2001 income for 10 years from the year of Commercial Production.	100% (90% for 7. A.Y. 2003-04) of the profits from export computed as profits of the business in proportion to export turnover to total turnover	7. Profit from domestic sales up to 25% of total sales would be deemed to be profits from exports only for the A.Y. 2001-02. 8. Availing the concession is at the option of the assessee. 9. Profits from onsite development of computer software outside India would be deemed to be profits from export.
	3. Special Economic Zone (SEZ) w.e.f. A.Y. 2001-02.	W.e.f. A.Y. 2001-2002, income from exports eligible for deduction for 10 years from the year of commercial production	Undertakings in SEZ which begins to manufacture or produce on or after 1-4-2003, exempt amount would be 100% of profits from export for first 5 assessment years, 50% for next two assessment years and for subsequent three assessment years, amount transferred to Special Economic Zone Reserve Account not exceeding 50% of such profit.	10. In the event of transfer of undertaking under amalgamation or demerger, the deduction shall continue to be allowed to the amalgamated or the resulting company. 11. No deduction shall be admissible to amalgamating or demerged company in the year of amalgamation or demerger. 12. Deduction not allowable if return not filed by due date u/s 139(1). 13. Does not apply to any undertaking being unit referred to in sec 2(zc) of the SEZ Act, 2005, which begins to manufacture or produce articles or things or computer software after 1-4-2005 in any SEZ. 14. The amount transferred to Reserve Account should be utilised for purposes specified in sub-section (1B)
10AA	Undetaking set up in Special Economic Zone w.e.f. A.Y. 2006-07	W.e.f. A.Y. 2006-07 income from export eligible for deduction starting from the year of commercial production	100% of profit from export for first 5 A.Y, 50% for next 5 A.Y.,& for subsequent 5 A.Y. amount trfd. to SEZ reserve A/c not exceeding 50% of such profit.	1. Not formed by splitting up or reconstruction of existing business or by transferring used plant and machinery. 2. In the event of transfer of undertaking under amalgamation or demerger, the deduction shall continue to be allowed to the amalgamated or the resulting company. 3. No deduction shall be admissible to amalgamating or demerged company in the year of amalgamation or demerger. 4. Report of a Chartered Accountant certifying deduction to be furnished. 5. The amount transferred to Reserve Account should be utilised for purposes specified in sub-section (2)
10B	Undertaking approved as a 100% Export-oriented Undertaking under section 14 of IDRA (100% EOU).	Same as Industrial undertaking in Free Trade Zone	Same as Industrial undertaking in Free Trade Zone	Same as 10A above, except No. 4
10BA	Undertaking manufacturing or producing “eligible articles or things”; i.e., all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material	W.e.f. A. Y. 2004-05 income derived from export out of India of “eligible articles or things” up to A. Y. 2009-10.	Profits from export computed as profits of the business in proportion to export turnover to total turnover.	1. Undertaking which has claimed deduction u/s 10A or 10B for any assessment year shall not be entitled to this deduction. 2. Manufactures eligible articles or things without the use of imported raw materials. It employs 20 or more workers. 3. Not formed by splitting up or reconstruction of the existing business or by transferring used plant and machinery. 4. 90% or more of its sales during the relevant previous year are by way of the exports of the eligible articles or things. 5. Report of a Chartered Accountant certifying deduction to be furnished. No other deduction allowed under any other section in respect of the eligible export profit
10C	Industrial undertaking in any Integrated Infrastructure Development Centre or Industrial Growth Centre in North-Eastern region	Income of ten consecutive A.Ys. from the year of production up to A.Y. 2003-04.	No limit	1. Manufactures or produces any article or thing on or after 1-4-1998. 2. Not formed by splitting up or reconstruction of the existing business or by transferring used plant and machinery. 3. No deduction u/s 80HH, 80HHA, 80-I, 80-IA, 80-IB or 80JJA in relation to profit and gains of the industrial undertaking. 4. No deduction is allowed if return not filed by due date prescribed u/s. 139(1).

LIST OF BONDS, CERTIFICATES, ETC. SPECIFIED FOR THE PURPOSES OF SECTION 10(15)(i)