UNIT – 1

EXEMPTED INCOMES U/S 10(2016-17 Assessment Year)

Dr. Thulasi Krishna. K, Ph.D.

Dept. of Management Studies, MITS - Madanapalle

Incomes Exempted from Tax U/S Section 10 (1) to 13B

• Agricultural income-Fully exempted U/S 10(1)

• Share of profit from a firm [Sec. 10(2A)]

• Tax paid on behalf of foreign companies [Sec. 10(6A)] [A foreign company renders technical services to an Indian

company owned by the Govt. & as per the agreement, the foreign co. is to be paid a fees of Rs. 1,00,000. Tax of Rs.30,000 on such fees

is also paid by the Indian company. Such tax is exempt and will not be grossed up with the income of the foreign company]

• Tax paid by Government or an Indian concern in case of a non-resident / foreign company [Sec. 10(6B)]

• Income arising to notified foreign companies from services provided in or outside India in project

connected with the security of India [Sec. 10(6C)]

• Income received by a public financial institution as exchange risk premium in

certain cases [Sec. 10(14A)] [the expression" exchange risk premium" means a premium paid by a person borrowing

foreign currency from a public financial institution to cover the risk which may be borne by such institution on account of fluctuations in

exchange rate of foreign currencies borrowed by such institution]

• Payment made by an Indian company, engaged in the business of operation of an

aircraft, to acquire an aircraft on lease from a foreign Government or foreign enterprise

[Sec. 10(15A)]

• Any income arising to anybody or authority established, constituted or appointed

under any enactment for the administration of public religious or charitable trusts

or endowments or societies for religious or charitable purposes [Section

10(23BBA)] (Temples, Gurudwaras, Wakf Boards, Churches, etc.)

• Income of Mutual Fund set up by a public sector bank or a public financial

institution [Section 10(23D)] [SBI, Canbank, Baroda Pioneer Mutual Funds, etc]

• Income of Credit Guarantee Funds Trust for MSMEs [Section 10(23EB)]

• Income by way of dividend or long-term capital gain of venture capital fund/undertaking

[Sec. 10(23FA)]

• Income of venture capital fund/venture capital company [Sec. 10(23FB)] [Ex. Nexus India

Capital, IFCI Venture Capital Funds, Ojas Venture Partners, etc.]

• Any income of an investment fund other than business income [Sec. 10(23FBA)] –

Applicable from the assessment year 2016-17

• Any income of a business trust by way of interest received from a special

purpose vehicle. [Section 10(23FC)]. The expression "special purpose vehicle"

means an Indian company in which the business trust holds controlling interest and any

specific percentage of shareholding or interest, as may be required by the regulations

under which such trust is granted registration.

• Any income of a business trust, being a real estate investment trust, by way

of renting or leasing or letting out any real estate asset owned directly by

such business trust (applicable from A.Y. 2016-17) [Sec. 10(23FCA)]

• Income by way of interest on securities, property income and income from other

sources of a registered trade union or an association of registered trade unions

[Section 10(24)] [All India Trade Union Congress, Centre of Indian Trade Unions, etc.]

• Any income of a statutory Central or State corporation or of a body/institution,

financed by the Government formed for promoting the interest of Scheduled

Castes/Tribes [Section 10(26B)] [National Scheduled Castes Finance and Development Corporation]

• Income of National Minorities Development and Finance Corporation [Section 10

(26BB)]

• Income of ex-servicemen corporations [Section 10 (26BBB)]

[Ex. Punjab Ex-servicemen Corporation, Tamilnadu Ex-servicemen Corporation,Maharashtra Ex-servicemen-Corporation, etc.]

• Income of co-operative society formed for promoting interests of members of

Scheduled Castes/Scheduled Tribes [Section 10(27)]

• Income of certain Commodity Boards/Authorities [Section 10(29A)] (Ex: Agricultural &

Processed Food Products Export Development Authority, Coffee Board, Tea Board, Spices Board, etc.)

• Capital gains on transfer of US-64 units [Section 10(33)]

• Income on units of Mutual Funds on or after April 1, 2003 [Section 10(35)]

• Grant received by subsidiary company from holding company [Section 10 (40)]

• Capital gain in above case [Section 10 (41)]

• Income received by certain foreign companies in Indian currency for import of

crude oil or any other notified goods or notified service to any person in India

[Section 10(48)]

• Any income of the National Financial Holdings Company Ltd. [Section 10(49)]