5 sources of revenue aside from EPF, PPF which might be exempt from revenue tax
New Delhi: As per revenue tax guidelines any particular person having an annual revenue of greater than Rs 2.50 lakh is required to file revenue tax return. It’s crucial regardless of the supply of revenue. Whereas wage revenue and enterprise revenue are taxed as per the relevant particular person tax slabs, there are particular sources of revenue which might be exempt from revenue tax regardless of the quantity. Maturity proceeds of Public Provident Fund (PPF), Staff Provident Fund (EPF), insurance coverage coverage are exempt from revenue tax.
Equally, there are particular different sources of revenue that aren’t taxable. Tax consultants say revenue from reward together with marriage reward, share of revenue in a partnership agency, instructional scholarships, gratuity and ancestral property can also be exempt from revenue tax.
1] Share of revenue in partnership agency: The share of revenue, obtained by a associate, within the complete revenue of the agency is exempt from revenue tax within the palms of the companions. As share of companions is arrived after offering for all bills and revenue tax, partnership is just not taxable. Nonetheless, remuneration obtained by a associate and curiosity on capital obtained by the associate is taxable.
2] Marriage reward: Presents obtained by a newly-wed couple throughout their wedding ceremony are exempt from tax. If the items are given by speedy relations, reminiscent of their mother and father, siblings or any of their siblings’ spouses, or the siblings of their mother and father, they’re exempt whatever the worth of the reward. Whether or not it’s money, shares, jewelry, cars, electronics, artefacts, and many others., and even immovable presents reminiscent of a home or land, shall not appeal to tax and are exempt below Part 56 of the Revenue Tax Act, 1961.
Nonetheless, if items should not marriage items, then they are going to be taxable if the mixed worth of the items exceeds Rs 50,000.
3] Academic scholarship: Any scholarship granted to fulfill the price of training is exempt from revenue tax as per Part 10(16) of Revenue Tax Act 1961. Nonetheless, to say the bills the scholarship revenue ought to have been used to fulfill the training bills solely.
4] Ancestral property: The tax relevant whereas inheriting an asset is known as Inheritance Tax or Property Tax. In India, Inheritance Tax is just not levied and (additionally known as Property Tax) is a tax which is levied on the time of inheriting any asset. Inheritance Tax is just not levied in India. So any quantity obtained below a Will or by means of inheritance or in contemplation of demise of the payer is exempted from revenue tax below Part 56 (ii).
5] Agricultural Revenue: In India, agricultural revenue is exempted from taxation and never included below complete revenue. Agricultural revenue refers to revenue earned from sources that embody farming land, buildings on or recognized with agricultural land and business produce from horticultural land.