SURE SHOT TAX FREE INCOME SOURCES

What are Tax Free Income Examples available in India?

Tax Free Income is any receipt of money on which either no tax is payable or which has been kept outside the definition of Income under the Income Tax Act, 1961.

List of Tax Free Income Examples in India ?

Under the Income Tax Act, there are certain fully tax free income and there are certain other incomes on which no income tax is payable subject to fulfilment of certain conditions. A comprehensive list of all such Tax Free Income types is given below:

1. Agricultural Income
2. Share of Profit in a Partnership Firm
3. Share of Income in HUF
4. Various Tax Free Allowances, Perquisites & Reimbursement received by an employee from the employer
5. Retirement benefits like PF, Gratuity and Leave Encashment
6. People living permanently in the state of Sikkim do not have to pay tax on their income irrespective of the source of income
7. Interest Income from NRE Bank Accounts
8. Income from Maturity or Claim from Insurance Companies
9. Remuneration received from a foreign government by an individual who is an Indian resident citizen is tax free
10. Income from Capital Gains subject to certain limits and conditions
11. Foreign allowance granted by the government of India to its employees posted abroad.
12. Compensation received from PSU Company at the time of Voluntary retirement or superannuation
13. Pension received from some organizations like UNO is tax-free
14. Any employee can take voluntary retirement before his superannuation. In this case maximum Rs. 5 Lakh is tax-free.
15. Retrenchment compensation to its employees due to the closure of the organization is tax-free.
16. Amount received from Government Schemes notified from time to time
17. Gifts received on the occasion of Marriage of an Individual are fully exempted.
18. Anything received by any will or inheritance is not taxable.
19. Gift received from any person up to Rs.50,000 is tax free
20. Gift received from notified relatives are tax free without any limit
21. Relief or compensation received by an individual from the Government as a result of any kind of natural calamity, riot, or any disturbances is not taxable.
22. Scholarships, Awards or Rewards received by an individual from the Government are not taxable
23. Income from Tax Free Bonds and Government Securities is completely tax free.
24. Income arising to non-resident by way of royalty or fees for technical services from services rendered to National Technical Research Organization will be exempt from tax in India
25. Any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014 made under the Government Savings Bank Act, 1873 is exempt from tax.
26. Any payment from the National Pension System Trust to an individual on closure of account is tax free
27. House Rent Allowance received by an employee subject to certain limits and conditions is exempt from tax
28. Special Allowances received by an employee subject to certain limits and conditions are exempt from tax
29. Transport Allowance of Rs.1600 per month received by an employee from the employer is exempt from tax.
30. Family pension received by the widow or children or nominated heirs, of a member of armed forces (including paramilitary forces) of the Union, is exempt from tax in the hands of such family members, if the death of such member of armed forces has occurred in the course of operational duty.
    
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