- By Aditya Pratap Singh
- Mon, 17 Jun 2024 03:24 PM (IST)
- Source:JND
Non-taxable income: Nowadays, a lot of people are not dependent on a single income source, many do side hustles apart from their job. People have also understood the importance of saving and investing and they earn good interest from their investment as well. But, amid all these earnings people do have not much idea about taxation. In India we have earnings with are subject to paying tax while some income sources don’t levy any taxes.
Income that does not fall under the purview of income tax is known as non-taxable income. This income is completely excluded from an individual’s tax liability computation. Below we have discussed income sources that do not attract taxes.
Life insurance claim or maturity- If you have purchased a life insurance policy, the amount received at maturity is completely non-taxable income. You don’t have to pay any tax on it. According to the rules, the annual premium of your life insurance policy should not exceed 10% of its sum assured; if the premium in the life insurance policy is more than this, you have to pay income tax on the additional amount.
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On the other hand, if you have a life insurance policy for a disabled or seriously ill person in your family, the premium amount can be up to 15% of the sum assured.
Gifts
According to the Income Tax Act, Income received from relatives, such as property, jewelry, or money, is not taxable under Section 56(2). However, gifts received from non-relatives are eligible for tax exemption of up to Rs.50,000 only. Assets received from a Hindu Undivided Family (HUF) or through inheritance do not attract tax, as per Section 10(2) of the Income Tax Act.
Agriculture-related income- If you own agricultural land and earn from farming or related activities, you do not have to pay any income tax on that income. Income from the purchase and sale of agricultural land is also non-taxable.
Gratuity: Gratuity received on the death or retirement of a government employee is fully tax-free. Private sector employees also get the benefit of tax exemption on end-of-service gratuity up to Rs 10 lakh. Bonus tax deductions under the Income Tax Act depend on various other factors.
In addition, Income from interest on certain schemes is completely tax-free as per section 10(15) of the Income Tax Act. These include Sukanya Samriddhi Yojana, Local Authority and Infrastructure Bonds, Gold Deposit Bonds, etc. No tax is levied on interest received on these.