Many individuals may not yet be aware of certain incomes that are non - taxable.
These sources of income have zero tax liability. Including these incomes in your ITR is a must as it shows the authorities the correct proof of your financial statue and helps you to claim deductions .
These incomes can help one make investments in such a manner that they can save more tax, especially in case of investment plans like the Sukanya Samriddhi Scheme.
What is Non - Taxable Income ?
Any income that is not subject to income tax is called non-taxable income.
These earnings are completely excluded from calculation of an individual's tax liability.
Types of Non- Taxable Incomes
1.Gifts/Inheritances
If the taxpayer receives an income or earnings through gifts from relatives, it is generally not considered as taxable income. There are exceptions in case the relatives is a foreign resident .
2.Life Insurance Return
The returns received upon maturity of life insurance policies, including the death benefits , are not taxable . This may vary in the case of the insurance amount .
3. Agricultural Income
Under section 10(1) of the Income Tax Act , income from agriculture and farming is non- taxable . The income generated from poultry and cattle rearing are also exempt from tax.
4.Gratuity
An amount that is received by employees for their dedicated and long-standing services to the company is called gratuity.
In the case of Government employees , the gratuity amount is completely tax - free . For non - government employees who are covered under the Gratuity Act of 1972 , tax exemption applies if the amount is less than Rs. 10 Lakh ,
5.Interest on Specific Income
The interest earned on certain scheme, Sukanya Samriddhi Scheme , Gold deposit bonds and tax - free infrastructure bonds is exempt from liabilities.