Section 10 Tax Exemption – Complete List of Exempt Income

Key Insights 

1. Review the exemptions in the new tax regime. For instance, the transport allowance under Section 10(14) might still apply. Check the latest exemption list to keep yourself updated.

2. Know the main tax-free limit. The basic exemption in Section 10 goes up as you get older. Senior citizens can claim up to ₹5,00,000 of tax-free income each year.

3. Your job may affect which exemptions you can claim. Some are only for certain professionals, such as judges, diplomats, or government employees working abroad. 

Are you planning your taxes under the new rules? Check out the full section 10 exemption list under new tax regime to see which benefits you can claim, such as the transport allowance exemption under section 10 14 in new tax regime.

Section 10 acts like a tax-free area in your salary slip. It shows which types of income are not taxed incomes exempt under Section 10. For example, the internet allowance exemption limit lets you leave out a certain amount from your taxable income, up to a set limit.

Example:

Thanks to the new tax rules, my monthly internet allowance exemption under section 10 of ₹3,000 was exempt from tax. By sticking to the standard ₹1,800 internet allowance exemption limit, I saved tax on ₹21,600 each year. I also looked at other benefits under Section 10 to maximise my savings.

Key Features of Section 10 of the Income Tax Act

You can access several ways to earn tax-free income. Section 10 of the Income Tax Act lists exemptions that lower your taxable salary and income.

Here are the key features of Section 10 Tax Exemption of the Income Tax Act:
 

If you know about these key exemptions, you can lower your taxable income and pay less tax each year.

Maximum Exemption Available Under Section 10 of the Income Tax Act

Find out how much income you can earn before you have to pay tax. Understanding the maximum exemption under Section 10 can help you take full advantage of your tax-saving options.

Here is the table that shows you the maximum exemption under Section 10 tax exemption:

 

When you reach senior citizen status, your basic exemption limit increases. This means you can keep up to ₹5,00,000 each year tax-free under Section 10.

Individuals Who Are Eligible for Section 10 Allowance Exemptions

See how much you could save on taxes. Your eligibility for Section 10 allowance exemptions depends on your job status, how your salary is structured, and the kinds of allowances you receive.

• Employees of the United Nations Organisation
• Government employees working outside India.
• Judges of the High Court
• Supreme Court and High Court judges receive a sumptuary allowance.
• Government employees who are Indian citizens living abroad are granted allowances.
• According to Section 10 (11A) of the Income Tax Act, this income tax exemption applies to anyone working outside India who represents India in that country.
• Section 10 exemptions also apply to employees of foreign companies if they stay in India for no more than 90 days and the company does not have any trade or business in India.
• High-ranking embassy officials, trade officials, and other officers are eligible for Section 10 exemptions.

Some jobs, like judges and diplomats, come with special benefits. If your position qualifies, you could receive substantial tax-free allowances under Section 10.

Documents Required for Section 10 Tax Exemption

Here is the list of the documents for the Section 10 tax exemption.

• Login details for the income tax portal
• PAN card
• Aadhar card
• Bank statement/ Passbook
• Any documents related to your different sources of income

Collect all the documents you need before you start. Having complete and accurate paperwork will make your Section 10 exemption filing go more smoothly.

How to Claim a Section 10 Tax Exemption?

To get the best tax savings, keep things simple. Remember to claim all the Section 10 exemptions you are eligible for when you file your return.

• Gather all important information and documents related to your income tax and any exemptions you qualify for under Income Tax Section 10.
• Download the form from the Income Tax Department website if you want to file offline, or fill it out directly on the website to file online.
• Fill in the form with details about all your income sources, including those that qualify for exemption under Section 10, such as capital gains, agricultural income, or dividends.
• Clearly state the exemptions you are claiming under Section 10. Include details about the specific subsections and clauses that apply to you.
• Submit the necessary documents for the exemptions you are claiming, like investment proofs, certificates, or other relevant paperwork.
• Double-check all the information on your income tax form and the supporting documents. After you finish, submit the form online or mail it in.
• Keep a copy of your form and all submitted documents for your records.

Start by collecting all the documents you need to claim your Section 10 exemptions. Next, follow each step carefully until your application is complete.

Conclusion

If you understand Section 10, you can improve your tax strategy. By knowing which exemptions apply, the age limits, your eligibility, and how to handle paperwork, you can keep more of your income and save each year.

FAQS

Can someone explain section 10 (14) (i) and (ii) in layman's terms? 

Section 10(14) of the Indian Income Tax Act gives tax exemptions for some special allowances that employers pay to employees. This section is divided into two parts, and each part covers different types of expenses.

The limit of 50K, based on basic salary, is not mentioned in Section 10(10AA) or in any circulars. Now, where is this limit coming from?  

You are probably referring to the earlier maximum exemption limit of ₹3,00,000, which applied to non-government employees who retired on or before March 31, 2023. This limit increased to ₹25,00,000 for non-government employees retiring on or after April 1, 2023. There is no official statutory limit of “₹50,000,” even if you consider basic salary, in Section 10(10AA) or related government notifications.

What is Section 10 of the Income Tax?  

Section 10 of the Income Tax Act, 1961, in India lists different types of income that are fully or partly exempt from tax, so they are not counted in a person’s total taxable income. These exemptions lower the tax burden for taxpayers, including salaried people, self-employed individuals, and investors.

What exactly is the exemption in Section 10(34)/10(35) under the Income Tax Act?  

Previously, Sections 10(34) and 10(35) of the Income Tax Act made some dividend and mutual fund income tax-free because the company had already paid tax on it. Starting from the financial year 2020-21 (assessment year 2021-22), these exemptions were removed, so this income is now usually taxable for the recipient.

Can I claim the exemption under section 10 if I choose the new tax regime?

No, if you choose the new tax regime, you cannot claim the exemption under Section 10.
 

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