Many people feel that the government has to pay tax on every type of income. But it’s not like that. There are some sources of income on which no tax is levied. However, you will be able to save tax on these only when you have complete knowledge of the rules. In such a situation, I am telling you on which type of income no tax is to be paid.
√ Tax Free Income: Everyone wants to save tax on their hard-earned money. For this, people also take various types of measures. But, there are some incomes on which tax is not payable. You don’t even have to do anything in this. You just need to know that this earning does not come under the purview of tax.
√ Inherited wealth: If you inherit any property, jewelery or cash from your parents, you will not have to pay any tax. If there is a will in your name, then you do not have to pay tax on the amount received through it. However, you will have to pay tax on the income you earn from whatever property you own.
√ Wedding gift: You do not have to pay any tax on any gift you receive from friends or relatives at your wedding. But, you should have received this gift around the time of your wedding. It is not that your wedding is today and you receive a gift after six months, then there will be no tax on it. Even if the value of the gift exceeds Rs 50,000, tax will be levied.
√ Profit received from partnership firm: If you are a partner in a company or Firm and you receive any amount as share of profit, then you will not have to pay tax on that also. Actually, your partnership firm has already paid tax on this amount. However, this exemption is only on the profits of the firm. If you get salary from the firm, then you will have to pay that tax.
√ Life insurance claim or maturity amount: If you have purchased a life insurance policy, the claim or maturity amount is completely tax free. However, the condition is that the annual premium of the policy should not exceed 10 percent of its sum assured. If it exceeds this amount, the excess amount will be taxed. In some cases this discount can be up to 15 percent.
√ Returns received from share or equity MF: If you have invested in shares or equity mutual funds, then returns of Rs 1 lakh on selling them are tax free. This return is calculated under Long Term Capital Gain (LTCG). However, returns above this amount attract
LTCG tax.
Understanding tax-free income sources is crucial for optimizing your financial strategy. By leveraging these exemptions, such as inherited wealth, wedding gifts, and life insurance claims, you can effectively reduce your tax liability. Stay informed and make the most of your earnings while filing your Income Tax Returns (ITR).
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