Tax Free Income: You will not have to pay a single rupee tax on these 5 earnings, know the rules of income tax

The Kalamkar News (New Delhi). People have many sources of income. Some earn money by doing a job and some earn money by doing business. Taxation on these incomes is done under the provisions of the Income Tax Act. 

Although not all types of income are tax-free, certain types of income do not come under its purview but their conditions are different. Under which some types of income are tax-free. Come, let us know here how many types of income are not taxed and what are the rules for it?

agricultural income

Income received from agricultural activities is considered tax-free under the Income Tax Act. However, it is important to note here that income from commercial industries related to agricultural activities, such as sale of agricultural produce, is taxable.

Gifts and Inheritance

Gifts received on occasions such as weddings or through wills and inheritances are generally not subject to income tax. Although there is an exception to the amount of tax-free gifts, a limit has also been set for it.

Interest received on PPF and EPF

Interest earned on investments in Public Provident Fund (PPF) and Employees Provident Fund (EPF) is tax-free. Both PPF and EPF are popular sources of long-term savings.

dividend

Dividends received from investments in stocks and mutual funds are tax-free in the hands of the recipient. However, the distributing company is liable to pay dividend distribution tax.

Long-term capital gains on equity

Profits from sale of equity shares held for more than one year are exempt from tax. However, short-term capital gains are subject to taxation.

Income slabs and tax rates

Individual taxpayers in India are categorized into different income slabs, each with its own tax rate. Income tax rates are subject to change in the annual budget.

Deductions and Exemptions

Various deductions and exemptions are available to taxpayers, such as under Section 80C for investments in tools such as life insurance, provident funds and equity-linked savings schemes.

filing income tax return

It is mandatory to file income tax returns for individuals, Hindu Undivided Families (HUF) and entities with specified income. The due date for filing returns is generally 31st July of the assessment year.

Penalty for non-compliance

Failure to file returns or providing incorrect information may result in penalty. Taxpayers are required to comply with the deadlines and provide accurate details in their tax returns.

Tax Deducted at Source (TDS)

TDS is a system where tax is deducted at the source of income itself. Employers, banks and other institutions are required to deduct TDS before making certain payments.