Income Tax: There is no tax on these 5 types of income, you should also know..

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.

How many types of tax-free income are there in India?
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 the 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 the 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 the sale of equity shares held for more than one year are exempt from tax. However, short-term capital gains are subject to taxation.

What are the rules governing income tax?
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 an 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 a penalty. Taxpayers are required to comply with the deadlines and provide accurate details in their tax returns.

PC Social media