The present article highlights provisions of section 10(10BC) of the Income Tax Act, which provides exemption towards amount received in case of any disaster.

Exemption provisions of section 10(10BC) of Income Tax Act

Provision of section 10(10BC) exempts any amount received / receivable by an individual or legal heir of the individual on account of any disaster. However, any of the following should have paid such amount-

  • The Central Government; or
  • The State Government; or
  • A local authority.

However, the amount received / receivable by the individual or legal heirs of the individual is not allowed as an exemption under section 10(10BC) to the extent the deduction is allowed under the Income Tax Act on account of any loss / damage caused by the disaster.

Meaning of the term ‘disaster’-

As seen above, the exemption under section 10(10BC) is available against the amount received on account of the disaster. Hence it is vitally important to understand the term ‘disaster’.

An explanation to section 10(10BC) of the Income Tax Act states that ‘disaster’ shall have the same meaning assigned under section 2(d) of the Disaster Management Act, 2005. As per the said section, disaster means as under-

Any disaster on account of any natural or man-made causes. It also includes disaster on account of any accident or negligence. Such a disaster should have resulted in any substantial loss of life or human suffering / damage or destruction of property / damage or degradation of the environment. The magnitude of such a disaster should be beyond the coping capacity of the community of the affected area.

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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One Comment

  1. VIJAY KHATAWKAR says:

    IF THE ASSESSEE DIED DUE TO COVID 19 HIS HAS FILED LAST THREE YEARS INCOME TAX RETURNS CAN HE GET THE BENEFIT OF SUCH MADICLAIM POLICY SUCH AMOUNT TRANSFER HIS LEGAL HEIR ACCOUNT IS IT TRUE .

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