Paying income tax is necessary for those earning individuals whose annual income is more than ₹2.5 lakh. However, while income tax return (ITR) filing, the taxpayer is advised to use income tax calculator properly as there are some sources of income other than Provident Fund (PF), Employees Provident Fund (EPF), Public Provident Fund (PPF) or National Pension System (NPS) that are income tax exempted. According to income tax act, one’s income from gift including marriage gift, share of profit in a partnership firm, education scholarship, gratuity and ancestral property are income tax exempted.
Speaking on the sources of income that are tax exempted under the income tax act 1961; Mumbai-based tax and investment expert Balwant Jain said, “One’s marriage gift or general gift up to ₹50,000 in one financial year, share of profit in partnership firm, education scholarship, ancestral property and gratuity is tax exempted subject to certain terms and conditions under the income tax act 1961.”
Speaking on how income tax rule applies on marriage gift SEBI registered tax and investment expert Jitendra Solanki said, “One’s income from marriage gift is 100 per cent income tax exempted provided the gift is received on or around the marriage date and the receiver of the gift is able to establish one’s gift as marriage gift. In case of general gift, a taxpayer is allowed to receive maximum ₹50,000 in a particular financial year.”
Share of profit in partnership firm:
One’s profit share in partnership firm is fully exempted from any kind of tax because the company has already paid income tax on it, said Balwant Jain.
Balwant Jain said that education scholarship either in India or abroad is 100 per cent tax exempted.
On inheritance of ancestral property including residential or commercial or both kinds of properties, jewelry, cash and bank balance, the beneficiary need not to pay income tax on it.
One’s gratuity income up to ₹20 lakh is 100 per cent income tax exempted.
Apart from this, one’s income from agriculture is also exempted from any kind of income tax.