Income Tax Rules 2025: Such sources of income are a great deal at tax exemption. Today, we shall talk about five sources of income-the Income-from-Agriculture-as-Exempt kind, which comes under this head in the Income Tax Act. It states the entire exemption of income coming out of agriculture under section 10(1) of the Income Tax Act.
Full income exemption from income will be met as per Section 10(1) of the Income Tax Act where the agricultural income has been defined as the income from the cultivation, processing, and distribution of products like wheat, rice, pulses, fruits, and vegetables. Any rent collected from agricultural land is also exempt from income tax provided that the land is reasonably and actively being used for agricultural purposes. This exemption gives the additional benefit to agriculturists. Similarly, income from the sale or purchase of agricultural land would not be treated as taxable income. Thus, the agricultural income is completely exempt under law.
As section 10 (1) of Income Tax states, income from agriculture is entirely exempt from taxation. It even includes through production, processing, and distribution, all realities of business related to wheat, rice, pulses, and fruits. Rent coming from property shafted for agricultural work would have also been free. Even den that’s not it, the income derived from the purchase and sale of agricultural lands is free from tax.
Gift Received From Relatives
These gifts remain untaxed. However, these close relatives comprise husband and wife; children of these marriages; brothers and sisters; any sibling-in-law, mother-in-law/father-in-law; all their fun; grandparents and their grandchildren;. Thus, all these close related family members are encouraged in gifting each other with love and bonding rather than taxation.
Gifts given on account of marriage are, however, completely exempt from taxing irrespective of the amount involved. Such gifts from friends or acquaintances amounting to Rs. 50,000 is free from any tax, but those exceeding this limit won’t be taxable at all.
Income From Gratuity
All gratuity arising on death or retirement of a government employee is absolutely exempt from tax liability. But, as regards the private employees covered under Gratuity Payment Act 1972, even this does not apply to retirement gratuity above Rs 20 Over 20 lakh will be subject to taxation.
Scholarship
Tax free scholarships are granted to students of any institution upon course completion. Also, there is voluntary retirement payment tax free upto Rs. 5 lakhs which benefits all students and employees for their future planning.
Some Pensions Qualify For Tax Exemption As Well
Pension payments received by winners of gallantry awards such as the Mahavir Chakra, Paramvir Chakra, and Vir Chakra are exempt from taxation. Similarly, the pensions received by the family members of Indian Armed Forces personnel are tax-free.
Also Read: EPFO Pension Update 2025: Big Hike Announced, Check Who Qualifies