Highlights:
- Tax payers are advised to use the income tax calculator properly while filing ITR
- 5 more sources apart from PF, PPF, NPS and EPF are exempted from Income Tax
Paying the Income Tax is necessary for all the citizens of India who earn more than ₹ 2.5 lakh annually. However, while the Income Tax Return (ITR) filing, the taxpayers are advised to use the income tax calculator properly as there are some sources of income apart from the Provident Fund (PF), Employees Provident Fund (EPF), Public Provident Fund (PPF) and the National Pension System (NPS) that are exempted from income tax.
According to the Income Tax Act, one’s income from gift including marriage gift, share of profit in a partnership firm, education scholarship, gratuity and ancestral property are income tax exempted.
Balwant Jain, Mumbai-based tax and investment expert, talking on the sources of income which are tax exempted under the Income Tax Act 1961 said, “One’s marriage gift or general gift up to ₹50,000 in one financial year, share of profit in partnership firm, education scholarship, ancestral property and gratuity is tax exempted subject to certain terms and conditions under the income tax act 1961.”
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5 Sources Exempt From Income Tax:
- Marriage gift: Speaking on how the income tax rule applies on marriage gift SEBI registered tax and investment expert Jitendra Solanki said, “One’s income from marriage gift is 100 per cent income tax exempted provided the gift is received on or around the marriage date and the receiver of the gift is able to establish one’s gift as a marriage gift. In case of a general gift, a taxpayer is allowed to receive maximum ₹50,000 in a particular financial year.”
- Share of profit in partnership firm: One’s profit share in a partnership firm is 100% exempted from any kind of tax as the company has already paid the income tax on it, said Balwant Jain.
- Education scholarship: Balwant Jain said that education scholarship either in India or abroad is 100 per cent tax exempted.
- Ancestral property: On the inheritance of an ancestral property including residential or commercial or both kinds of properties, jewellery, cash and bank balance, the beneficiary need not pay income tax on it.
- Gratuity: One’s gratuity income up to ₹ 20 lakh is 100% income tax exempted.
Apart from these 5 sources, the income coming in from agriculture is also exempted from any kind of income tax.
