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Income Tax

11 Types of incomes which are not taxed in India in 2021?

By August 1st, 2022No Comments

1. Income Through Savings Account Interest

Interest earned on a savings account is exempt for taxation purposes for a limit of Rs. 10,000/-.

This amount is cumulative of all saving bank accounts.

This limit extends to Rs. 50,000/- in the case of senior citizens.


2. Amount Received as Dividends on Shares or Equity Mutual Funds

The dividends received from any Indian Company upto Rs. 10 Lakhs are tax-free in the hands of the investors.

The dividends received from any Mutual Fund Company are fully exempt without any limit.


3. Wedding Gifts

Wedding gifts are non-taxable in India.

Whether it is cash, cheque, or anything, gifts received on getting married do not attract tax.

Such gifts can be from your relatives or friends.


4. Other Gifts

Gifts received other than on wedding upto Rs. 50,000/- are exempt.


5. Agriculture Income

Any kind of income from agricultural land is exempted from tax.

Such an income can be related to rent from land, revenue from land, the amount generated through agriculture products, and the amount through a farm building.


6. Amount Received in the form of Will

The amount received through inheritance in the form of a Will is not taxable in India. Therefore, the amount you receive as per a Will shall not be taxed in India.


7. Amount from Provident Funds

Interest received on the government-recognized provident fund or PPF is not taxable.

You have to wait for five years before you withdraw the amount from your Provident Fund.


8. Amount Received from Gratuity

Money received as gratuity is tax-free up to a limit.

The limit for tax-free gratuity is Rs. 20 lakhs.


9. Voluntary Retirement or Separation Payment

Any amount received by an employee of a public sector company, of a local authority, of statutory authority, of a cooperative society or university at the time of voluntary retirement or voluntary separation is completely exempt from tax.

The maximum amount of exemption available for the income received at the voluntary retirement has been capped at five lakh rupees.


10. Money Received from Insurance

Any amount received under a Life Insurance Policy (LIP) or under a Keyman Insurance Policy (KIP) or under an insurance policy for which the premium payable for any of the years during the term of the policy exceeds 10% of the actual capital sum assured, is fully exempt from tax.

Also, all proceeds received on the death of an insured person are fully exempt from income tax.

Hence, money received from life insurance policies, whether from the LIC or any other private insurance company is exempt from income tax.


11. Scholarships

Scholarship granted to meet the cost of education is exempt from income tax.


12. Awards

The amount provided as pension and family pension of Gallantry Award Winners like Paramvir Chakra, Mahavir Chakra, and Vir Chakra and also other Gallantry Award winners notified by the Central Government are exempt.