NON TAXABLE INCOME U/S 10

1. Agriculture Income u/s 10(1)

Agriculture Income from a land situated in India which is used for
the purpose of agriculture from where the revenue is derived
then it is fully exempt in the hands receiver u/s 10(1).

2. Receipt by a member from his HUF u/s 10(2)

Any amount received by a member from his HUF out of the estate of income
of the HUF is not taxable in the hands of the member u/s 10(2).

Daburs Family Tree

3. Share of Profit received by a partner from his partnership firm u/s 10(2A)

A partner received 3 types of income from his firm
a) Salary/Remuneration/Commission/Bonus taxable in the hands of partner as his
business income
b) Interest on Capital -- taxable in the hands of partner as his business income
c) Share of Profit Exempt in the hands of partner u/s 10(2A)
4. Leave Travel concession u/s 10(5)
Individual Travel Concession
From his employer
For himself For himself &his family
Proceeding on leave Proceeding after retirement or
termination of service
Any place in India
Actual travelling expenditure is exempt

Note :
1. Family Spouse & Children (dependent or independent),
Parent, Brother & Sister (dependent)
2. Only 2 children (born on or after 1/10/98)
3. In case of twince consider only one child
4. Exemption 2 journey performed in a block of four calendar years commencing from
1986.

Rule 2B :

Different Situation Amount Exempt
1. By Air Economy class air fare place of origin & destination
(farthest point from origin by the shortest route)
2. By Rail First class A.C.
least of a) shortest route, b) amount spent
3. Other than Air &Rail First class A.C.
least of a) shortest route, b) amount spent
4. Recognized public transport First class A.C.
least of a) shortest route, b) amount spent
5. Not having recognized public First class A.C.
transport least of a) shortest route, b) amount spent

5. Gratuity u/s 10(10)

Gratuity
Govt. employee Payment of gratuity act-1972 Others
(POGA-1972) (Non-govt employees &
not covered by POGA)
Exempt least of :-
1) Actual Amount Received
2) 15 days salary for every
completed year of service
3) Monetary limit-- ` 10,00,000

# Salary = Basic+D.A.
# Salary = Last drawn salary
#1 month = 26 days
# Completed year = in excess of
6 month
Exempt least of :-
1)Actual Amount Received
2) month average salary
for every fully completed
3)Monetary limit-` 10,00,000

#Salary= Basic+D.A.+Com.
#average of last 10 month
salary
#Year=Only fully completed
year
Fully exempt
6. Pension u/s 10(10A)
Pension
Uncommuted Commuted
(periodical) (lumpsum)
Govt employee Others
Received Not Received
Gratuity Gratuity
FCV = Fully commuted value
Fully Taxable
(govt/non govt)

Fully Exempt

1/3 of FCV is of FCV is
Exempt Exempt

7. Leave Salary Encashment u/s 10(10AA)

Leave Salary Encashment
During continuation of On retirement/termination
Employment of employment
Govt. employees Others
Exempt least of :-
1. Actual Amount Received
2. 10 times average salary
3. Monetary limit- `. 300,000

# Salary = Basic+DA+Comm.
# Average of last 10 months
# Year = Only fully completed
year
Fully Taxable
Fully Exempt


8) Amount received from LIC (Life Insurance Policy) u/s 10(10D)
Any amount received from LIC towards maturity of policy is fully exempt.
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9) Amount received from statutory providend fund & public providend fund u/s 10(11)
Any amount received on maturity or withdrawal from SPF account or PPF
account is fully exempt u/s 10(11)

10) Amount received from Recognised providend fund u/s 10(12)
Any amount received from RPF account on maturity or withdrawal is fully
exempt u/s10(12) if an employee has rendered continious services with his
employer for 5 years or more.

11) Amount received from an approved superannuation fund u/s 10(13)
Any amount received from an approved superannuation fund is fully exempt
from tax along with accrued interest there on.
12. House Rent Allowance u/s 10(13A)
Exempt least of :
a) Actual Amount Received
b) Rent Paid 10% of Salary
c) 50% of Salary (for metro cities)
OR
40% of Salary (for other cities)

Salary = Basic + DA + Commission (on due basis for the period the rented
accomodation is occupied by the employee only).
13. Special allowance notified as exempt u/s 10(14)
a) conveyance allowance for pursuing academic research & other professional
pursuits --- fully exempt (to the extent used for official work).

b) Area/Remote Area/Border Area/Hilly Area/Snow Covered Area Allowance
fully exempt unless any exemption amount is not given.

c) Tribal Area Allowance exempt upto rs. 200/-pm max.

d) Children Education Allowance
Children Education Allowance is exempt up to Rs.100/-pm, per child
for maximum 2 children.
e) Children Hostel Allowance
Children Hostel Allowance is exempt up to Rs. 300/-pm, per child for
maximum 2 children.
f) Transport Allowance
Transport Allowance is exempted up to Rs.800/-pm maximum & in
case of physically handicapped, blind etc. it is Rs.1600/-pm maximum.
14. Scholarship u/s 10(16)
Any amount received towards scholarship for educational purpose is fully
exempt u/s 10(16).

15. Award from Government u/s 10(18)
Any award from the government like BharatRatna, Paramveerchakra,etc. is
exempt u/s 10(18)

Lataji receiving the Bharat Ratna by President
K.R.Narayan
16. Income of Minor child u/s 10(32)
The income of minor child is to be first clubbed with the income of the parent
u/s 64(1A). There after exemption is available to the parent up to Rs.1500/-
per child, per year.
17. Dividend u/s 10(34)
Any income by way of dividends by an indian company is fully exempt.