An exemption under section 10(8A) and section 10(8B) of the Income Tax Act are interconnected. Section 10(8A) provides exemption towards remuneration / fee and other income received by the ‘consultant’. Whereas, section 10(8B) provides exemption towards remuneration / fee and other income received by the employee of the consultant.

Exemption available, and conditions to be satisfied, under both the sections are explained thoroughly in the present article.

Section 10(8A) of the Income Tax Act exempts the income of a consultant–

Following two exemptions are available under section 10(8A)

1. Any remuneration / fee received by the ‘consultant’ (directly or indirectly) from the international organization. The said international organization must be deriving its fund under the technical assistance grant agreement between the organization and the foreign Government; and

2. Any other income accruing or arising to the ‘consultant’ outside India, and such income is not deemed to accrue or arise in India. The consultant should be paying either any income tax or social security tax on such income to the foreign Government.

As per the explanation to section 10(8A), the term consultant means-

The following categories of person who is engaged by the international organization for rendering technical service in India, in connection with any technical assistance project or programme-

  • Any individual who is not a citizen of India; or
  • Any individual, who is a citizen of India, but is not ordinarily resident in India; or
  • Any person who is a non-resident.

Conditions to be fulfilled for claiming exemption under section 10(8A)

In order to avail exemption available under section 10(8A) of the Income Tax Act, the following listed conditions need to be satisfied-

1. The remuneration or fee is paid to the consultant for rendering technical service in India.

2. The technical service rendered by the consultant should be in connection with the technical assistance project or programme.

3. The remuneration or fee (directly or indirectly) should have been paid out of the fund made available to an international organization, as per the agreement entered between the international organization and the foreign Government.

4. The technical assistance is provided in accordance with the agreement entered between the Central Government and the international organization.

5. The agreement relating to the appointment of the consultant should be approved by the prescribed authority.

Section 10(8B) of the Income Tax Act exempts the income of employees of a consultant-

Following two exemptions are available under section 10(8B)

1. Any remuneration / fee received by the individual [who is assigned duty in India under the technical assistance project or programme]. The said remuneration should have been received by the Individual (directly or indirectly) from the consultant referred under section 10(8A); and

2. Any other income accruing or arising to the individual outside India, and such income is not deemed to accrue or arise in India. The individual should be paying either any income tax or social security tax to the foreign Government on such income.

Conditions to be fulfilled for claiming exemption under section 10(8B)

1. The individual should be-

  • An employee of the consultant referred under section 10(8A); and
  • He should not be a citizen of India. However, in case he is a citizen of India, he should not be ordinarily resident in India.

2. The remuneration / fee should have been received in connection with the technical assistance programme referred under section 10(8A).

3. The contract of service of the individual should be approved by the competent authority prior to the commencement of the service.

Table – Articles on Section 10 Exemptions

Sr. No. Particulars
1 Section 10(1)– Exemption to Agricultural Income
2 Section 10(2) Exemption to amount received by co-parcener from HUF
3 Section 10(2A) Exemption towards share of income from firm/LLP
4 Exemptions towards interest to non-residents | Section 10(4) & 10(4B)
5 Exemption on Tax paid by Govt or Indian concern on certain income of a foreign company
6 Section 10(7) Perquisites/allowances exemption to Govt employees serving outside India
7 Exemption- Section 10(8A) & section 10(8B) of Income Tax Act
8 Exemption towards commuted value of pension Section 10(10A)
9 Exemption towards retrenchment compensation received by workman Section 10(10B)
10 Section 10(10BC) Exemption towards compensation received on account of any disaster
11 Section 10(10C) Exemption of amount received on voluntary retirement
12 Exemption towards tax paid by employer on non-monetary perquisites: Section 10(10CC)
13 Section 10(10D) Exemption towards amount received under a Life Insurance Policy
14 Exemption for amount received from Statutory & Recognized PF
15 Exemption for payment from approved superannuation fund Section 10(13)
16 Income Tax Exemption on prescribed allowances/ benefits | Section 10(14)
17 Section 10(15) Exemption- Interest on Bonds, Debentures, Securities
18 Scholarship exemption | Section 10(16) | Income Tax Act 1961
19 Exemption towards income for administration of Charitable or Religious Institution
20 Section 10(32) Exemption | Income of minor clubbed with parent
21 Exemption for dividend income received from Indian Company | Section 10(34)
22 Section 10(34A) Exemption towards income received by a shareholder on buy back of shares
23 Section 10(35) Exemption towards income received from units
24 Section 10(37) Exemption towards Capital Gain arising on Compulsory Acquisition of Urban Agricultural Land

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