Section 89 of the Income Tax Act, 1961 allows tax relief for individuals on the following types of income: If a person who is not a citizen receives compensation for representing India in a foreign country, the income is exempt. The person is an official of one of the following persons: In the case of an individual taxpayer, the reduction of leave received by him shall be exempt from tax pursuant to Article 10(5). The discount or travel assistance must be obtained by: In this article, we discussed in detail each exempt income as well as the special provisions of the exemption for employees under section 10 of the Income Tax Act. A person cannot receive income in the form of a benefit by paying money. This preferential income is taxable in the hands of the employee as part of the salary. However, the employer may choose to pay the tax on behalf of the employee. In such a case, the tax is exempt in the hands of the employee. Income generated by a partnership is exempt under Article 10(2A). Here, the partnership must be taxed as a partnership under the Income Tax Act, 1961. The proportion of profit or income received by the taxpayer must be the same as in the partnership deed. Section 10 of the Income Tax Act 1961 covers income which is not part of total income, while the total tax payable is calculated. This income is also known as exempt income. Income derived by an entity from long-term capital gains shall be taken into account when calculating the entity`s accounting profit and taxes payable under Article 115JB.
In addition, the exemption would not be permitted if the sale transaction takes place on a recognized stock exchange located in an international financial services centre and the consideration for which is paid or payable in a foreign currency. The exemption is also excluded for long-term capital gains arising from the transfer of an interest in a corporation, an interest in a share of a share of a corporation trust if the transaction occurs on or after April 1, 2018. An employer may provide a special allowance to its employees to cover certain expenses. These expenses must be incurred in the performance of his official duties. These allowances or benefits are not part of the benefits. For the allowances contemplated in this section, there is no limit to the amount that an employer may grant to the employee. In addition, such certificates may only be used for the purpose for which they were provided. In addition, the association should benefit from an exemption for a voluntary contribution (with the exception of the contribution in cash or in kind referred to in the clauses above).
However, in order to benefit from this exemption, the association must not hold the contribution in any form or manner other than those referred to in Article 11(5) after one year from the end of the preceding year in which the asset was acquired. In addition, the search network exemption would not be granted for income that is the profits and profits of companies. However, if the business is incidental to the association in order to achieve its objectives and the association maintains separate accounts in respect of those transactions, the profits and profits of that business would be permitted on an exceptional basis. These allowances are granted to cover expenses incurred in connection with the activity at the usual place of work. For the allowances contemplated in this section, there is no limit to the amount that an employer may grant to the employee. Article 10(2) provides for the exemption of income received by a taxpayer in his capacity as a member of the HUF. Therefore, all income received by a natural person as a member of the HUF is exempt from tax. In this case, the part of the salary received by an employee for rent and housing is exempt from tax under Article 10, paragraph 13A. However, the following restrictions apply: For example, the total profit of the partnership for the financial year 2019-20 is Rs 10,00,000. According to the partnership deed, Mr.
Arun`s share of the profit share is 40%. In addition, he can earn income from the company in the amount of Rs 4,00,000, which is equivalent to 40% of Rs 10 lakh. This amount of income of Rs 4 lakh is exempt from tax. These allowances are taxable in the hands of employees if they receive them in excess of the prescribed limit. Taxation is independent of actual expenses incurred. For the purposes of Article 10(14)(ii), compensation is prescribed in Rule 2BB. In addition, these institutions should benefit from an exemption for a voluntary contribution (with the exception of the contribution in cash or in kind referred to in the clauses above). However, in order to benefit from this exemption, the association must not hold the contribution in any form or manner other than those referred to in Article 11(5) after one year from the end of the preceding year in which the asset was acquired. In addition, the exemption would not be granted to those institutions for income that is profit and corporate profit. However, if the operations are ancillary to the achievement of the objectives of the association and the institutions keep separate accounts for those operations, the profits and profits of those operations would exceptionally be allowed.