ITR Filing Deadline: Generally every person has to pay Income Tax on his earnings. Whether the income is from salary, from your business, the liability of income tax is made by everyone. However, in the Income Tax Rules of India, a provision has been made to exempt income from tax in certain cases. For this, the role of section 80C (80C) to 80U (80U) of Income Tax becomes important. Many deduction measures have been taken in these sections, with the help of which people try to make maximum income tax free. Today we will tell you about such sources of income, which are not taxed.
According to ClearTax, a company that provides tax-related digital services, the first number in tax-free income is income from agriculture. Income tax is not levied on the income earned from agriculture in India. However, if you are earning income from sources other than agriculture, then agricultural income will be used to determine the tax slab. Even in this situation, tax will be levied only on the income received from other sources and the income earned from Khoti-Bari will remain tax-free.
Provident Fund (PF) and Gratuity
PF and gratuity are the most important social security for the employed people. After retirement, when the main source of income ie salary disappears, then PF and gratuity are very useful. For this reason they have also been kept free from tax. However, there are some conditions attached to it as well. If your PF has been deducted for more than five years, then it becomes tax free only. If you withdraw PF before five years, you have to pay TDS at the rate of 10 percent. If your total income is not taxable, then the refund of this deducted TDS can be claimed in ITR.
Gratuity received by government employees is completely tax free. Whether a government employee dies or he withdraws gratuity after retirement, its amount remains tax free. For private sector employees, this exemption is available with conditions. Private sector employees get tax exemption only on gratuity up to Rs 10 lakh.
Gifts up to Rs 50,000
Tax on gifts is a very old thing. This tax has been present in India since the time of Prime Minister Nehru. Expensive gifts are taxed under Income Tax rules. After the amendment in the income tax provisions related to gifts in 2017, it has been decided that expensive gifts will be taxable. Whether you have received cash in gift or cheque, draft, movable and immovable property, you have to show them in ITR in Income from Other Sources. However, if the value of the gift is up to Rs 50,000, then it will be exempt from tax. Apart from these, all gifts received on occasions like marriage or anniversary are tax free. All gifts received from family members are also tax free. At the time of selling these, there is definitely a liability of long term capital gains tax.
Salary has many components. Some of these are taxable, while some are tax free. For example, allowances like transportation allowance, lunch vouchers, payment for mobile phone or internet bills, share for buying books and magazines, etc. are tax-free.
Do not be surprised to see scholarships in this list. Scholarship money is also considered as income. The only good thing is that it is considered as tax free income. Scholarship money is exempted from tax under section 56 (ii) of the Income Tax Act.
Pensions of Gallantry Awardees
There is no tax on the pension of people honored with various gallantry awards of the Government of India. Along with the pension of people who have received gallantry awards like Param Vir Chakra, Maha Vir Chakra and Vir Chakra, family pension has also been kept tax free.
Reverse Mortgage Scheme
When you sell a property or transfer it in someone’s name, then long term capital gains tax has to be paid. Senior citizens are exempted from this tax. Apart from this, if the taxpayer of 62 years of age or more takes a loan against a property, then it is also tax free.
ITR Filing Deadline: The due date to file the annual ITR is generally July 31 and unless the government doesn’t extend it further, July is the month when this process should be done by the taxpayers.