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The Government of India provides some exemptions for the reduction of the tax burden of the assessee. Section 10 of the Income Tax Act deals with those exemption provisions and the terms and conditions on which one can avail a tax exemption.
The present article shall discuss the Exemptions under Section 10 of the Income Tax Act.
Table of Contents
During the calculation of the tax liability of an individual, there are certain income sources that don’t form a part of the total income. Section 10 of the Income Tax Act 19611 includes all those exemptions that an assessee can get while paying income tax.
There are various exemptions u/s 10 of the Income Tax Act. The major exceptions are discussed below-
However, there are a few exceptions that are included in Section 10 (13A) Rule 2A. The exemption is allowed for the least of the following amounts:
Section 10 (5), or leave travel allowance exemption, is applicable for individual assessees. The LTA exemption is applicable only to the domestic travel expenses, such as airfare, train or bus fare, incurred by the employee.
Other expenses, such as transportation within the destination, sightseeing, hotels, and food, are not covered. Additionally, the exemption is limited to LTA provided in your CTC by the employer.
For instance, if an employee is given an LTA of Rs 30,000 and incurs travel expenses of Rs 20,000, only the amount actually spent on travel would be exempt from taxes, and the remaining Rs 10,000 would be included as taxable income.
Given below is the list of the exemptions u/s 10 of the ITA ie Income Tax Act
The above-mentioned exemptions can surely reduce the tax burden of the assessee, which shall, in turn, encourage them for the timely filing of their income tax returns and help in avoiding any penalties consequential to the late or non-filing of the same.
During the calculation of the tax liability of an individual, there are certain income sources that don’t form a part of the total income. Section 10 of the Income Tax Act 1961 includes all those exemptions that a taxpayer can get while paying income tax.
This exemption helps in the reduction of the tax liability of the assessee, which is one of the most important benefits of claiming such an exemption.
The exemption is allowed for the least of the following amounts: • Actual HRA received • 50% of [basic salary + DA] for those living in Delhi, Mumbai, Chennai, Kolkata or • 40% of [basic salary + DA] for those living in other cities • Actual rent paid (-) 10% of basic salary + DA
This section deals with educational or medical institutions whose aggregate annual receipts don’t exceed Rs.5 crore and is eligible for exemption under this section.
The claim of exemption under Section 10 can be made by filing an income tax return.
Read Our Article: Overview of Section 276B of the Income Tax Act 1961
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