New Delhi – The annual ritual for the people is once again the year when the individuals and other categories of taxpayers are ready to submit Income Tax Return (ITR). While the Income Tax Department has given out all of the precise laws pertaining to ITR in accordance with the Income Tax Act, there are a few categories of income that are exempt from the Income Tax Act’s reach. Tax-free incomes are a sort of income that is not subject to taxes.
Look Here At Five Major Tax-free Sources Of Income In India
1. Gift Received From Relatives
Section 56 of the Internal Revenue Code exempts gifts from taxation. For the purpose of claiming this exemption, the following will be deemed related.
- (a) The individual’s spouse
- (b) The individual’s brother or sister
- (c) The individual’s spouse’s brother or sister
- (d) A brother or sister of one of the individual’s parents
- (e) Any descendant or lineal ancestor of the individual
- (f) Any descendant or lineal descendant of the individual’s spouse
- (g) Spouse of the people mentioned in (b) to (f).
2. Agricultural Income
In the country, agricultural income is not taxed. If you have non-agricultural income as well, your agricultural income will be taken into account for rate purposes when determining non-agricultural income. Even if your only source of income is agriculture, you should keep track of your agricultural revenue and expenditure.
3. Provident Fund
Employee Provident Fund (EPF) returns are tax-free for employees who have contributed for more than 5 years at their current job. This is true even if the person has worked for multiple organizations/employers over the last five years.
Under section 56(ii) of the Income Tax Act, income earned on a scholarship is tax-free.
4. Salary Components
Tax-free are portions of your pay that are reimbursed, such as transportation allowance, meal coupons, mobile phone bills, internet bills, books and periodicals, leave travel allowance, leave travel concession, and so on. The Central Board of Direct Taxes (CBDT) has already announced the Income Tax Return Forms (ITR Forms) for Assessment Year 2021-22. (FY 2020-21). In comparison to last year, there has been no change in the way ITR Forms are filed.