Under which section dividend income is exempt?
As per section 10(35) of Income Tax Act, any income received by an individual/HUF as dividend from a debt mutual fund scheme or an equity mutual fund scheme is fully exempt from tax. In addition to tax in the hand of investors, dividends declared by domestic companies also attract a Dividend Distribution Tax (DDT).
Which dividend is exempt?
The dividends received from any Indian Company upto Rs. 10 Lakhs are tax free in the hands of the investors under Section 10(34). However, the dividends received from any Mutual Fund Company are fully exempt without any maximum limit under Section 10(35).
What is the exemption limit for dividend income?
2021. The threshold limit does not apply in case the shareholder is a HUF, FIRMS, COMPANY, TRUSTS ETC. i.e TDS is required to be deducted on entire dividend amount. Further threshold limit of Rs 5000 apply only when dividend is paid other than cash….Taxability of Dividend w.e.f F.Y 2020-2021.
| Amount of Dividend | Section 195 | Section 196C/196D |
|---|---|---|
| Above 5 crore | 15% | 37% |
What is section 10 exemption in income tax?
The objective of section 10 of the Income Tax Act is to reduce the burden of the different structure of the tax such as rent allowance, allowance for children education, travel allowance, gratuity and so on. …
What is Section 10 26AAA of tax?
The section 10(26AAA) covers the income of a Sikkimese individual which is arising either in the state of Sikkim or by way of dividend or interest on securities, is not to be included in total income for tax calculation.
Which income is exempted from tax?
Tax Free / Exempt Income Under Income Tax Act, 1961
| Allowances | Exemption Limit |
|---|---|
| Children Education Allowance | Up to Rs. 100 per month per child up to a maximum of 2 children is exempt |
| Hostel Expenditure Allowance | Up to Rs. 300 per month per child up to a maximum of 2 children is exempt |
How do I show exempt income in ITR?
There is a schedule called Exempt Income (EI) in the tax forms where you need to give details of exempt income. “This is necessary to match with form 26AS details being collected from various sources by the income tax department.
What is Section 87A of Income Tax Act?
Rebate under Section 87A provides for a lower tax payment from individuals earning below a specified limit. According to the Income Tax Department, “An individual who is resident in India and whose total income does not exceed Rs. 3,50,000 is entitled to claim rebate under section 87A.
What is exemptions under section 10 & 17 in income tax?
Section 10 of the Income Tax Act covers many allowances such as Leave Travel Allowance, Uniform Allowance, Travelling Allowance, House Rent Allowance and some more. However, some special allowances that are exempt fall under Section 10 (14).
What is Section 10 15 of Income Tax Act?
Interest Income exempted under section 10(15) of Income Tax Act, 1961. Interest income or premium on redemption or other payments on notified securities; bonds; annuity certificates; savings and other certificates. An Individual (owning the bonds in the form of nominee or survivor of the non-resident Indian).
What is exemption under section 17 in income tax?
Section 17(1) of the Income tax Act gives an inclusive and not exhaustive definition of “Salaries” including therein (i) Wages (ii) Annuity or pension (iii) Gratuity (iv) Fees, Commission, perquisites or profits in lieu of salary (v) Advance of Salary (vi) Amount transferred from unrecognized provident fund to …
What is Section 16 under Income Tax Act?
Section 16 of Income Tax Act, 1961 provides deduction from income chargeable to tax under the head ‘salaries’. It provides deductions for the standard deduction, entertainment allowance, and professional tax. Through this deduction, a salaried taxpayer can lower his/ her taxable salary income chargeable to tax.
What are the tax-free perquisites?
An insurance premium paid by an employer on an accident policy taken out for the employee is a tax-free perquisite. Also, employers contribution to the superannuation fund of the employee provided such contribution does not exceed Rs. 1,50,000 per employee per year can be treated as a tax-free perquisite.
What is Section 17/2 VII of Income Tax Act?
It had introduced two new sub- classes, Sub Clause (vii) & (viia) Under Clause 2 of the section 17. (c) In an approved superannuation fund , To the extent it exceeds Rs….Perquisite Valuation under Clause (vii) & (viia) of Section 17.
| Under Clause (vii), this would be – | |
|---|---|
| Total employer’s contribution | Rs. 9,00,000/- |
| Perquisite value | Rs. 1,50,000/- |
What is Section 10 of IT Act?
Section 10 of the Income Tax Act allows the computation of specific incomes as tax-free. As per the Income Tax Act, 1961, every Indian citizen who earns above a certain threshold of income is liable to pay taxes. Hence, with the drawdown of each financial year, taxpayers seek out ways to minimize their tax liabilities.
What is US 17 2 Income Tax?
Broadly, “perquisite” is defined in the section 17(2) of the Income-tax Act as including: 1) Value of rent-free or concessional rent accommodation provided by the employer. 2) Value of any benefit/amenity granted free or at concessional rate to specified employees etc.
How are perquisites treated for income tax purposes?
According to the Finance Act, 2005, perquisites are taxed by the government in case these perks are provided or are deemed to be provided to employees by employers. The rate at which perquisites are taxed is 30% of the value of fringe benefits.
Which is not included in salary income?
Who is person under the Income Tax Act?
The term ‘person’ under the Income-tax Act includes natural as well as artificial persons. It can be an association of persons or a body of individuals or a local authority or an artificial juridical person.