Tax Free Income: You do not have to pay tax on every kind of income. The government keeps income from some sources free from income tax. Because, nowadays most people earn in many ways, so in such a situation it becomes important to know on which income you have to pay income tax and on which not. Today we will tell you about non-taxable income.
Non-taxable income is income that you don’t have to pay tax on. You can exclude income from certain sources when you calculate your income tax liability. There are many sources of non-taxable income in India. Non-taxable can help you manage your finances better and reduce your tax burden.
If you inherit any wealth, jewellery or cash from your parents, you will not have to pay any tax. If you have a will in your name, you will not have to pay tax on the money received through it. However, you will have to pay tax on the income you earn from whatever property you own.
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If you have a life insurance policy, the money you receive when the policy matures is non-taxable. This means you don’t have to pay any tax on it. However, the annual premium (the amount you pay every year for the policy) should not exceed 10% of the sum assured (the price of the policy). If it is more, you will have to pay tax on the excess amount.
According to the Income Tax Act, gifts received from blood relatives, such as property, jewellery or money, are not taxable. Gifts received from non-relatives are tax-free only up to Rs 50,000. Property or gifts inherited from a Hindu Undivided Family (HUF) are also tax-free.
If you earn money from farming or related activities on your agricultural land, this income is tax-free. This also includes income from buying and selling agricultural land.
There is no income tax on gratuity. It is the amount given to employees on retirement or as death benefit. This gratuity is completely tax-free for government employees. For private sector employees, gratuity up to Rs 10 lakh is tax-free.
As per section 10(15) of the Income Tax Act, income from Sukanya Samriddhi Yojana, local authority and infrastructure bonds and gold deposit bonds is also not chargeable for income tax.
