Income Tax Free Income: These five types of income are exempt from paying any taxes at all. Learn more

Income Tax Free Income: These five types of income are exempt from paying any taxes at all. Learn more

Income Tax Free Income: These five types of income are exempt from paying any taxes at all. Learn more

Income Tax Free Income: Taxpayers must give the government a portion of their income in the form of taxes. In this respect, the government has created many measures. Additionally, certain income is exempt from taxes. Today, we're going to teach you about five types of earnings for which you won't have to pay any taxes at all, as well as what will happen if you provide the Income Tax Department false information about your income.

People get money from a variety of ways. While some people generate money via their work, others conduct business in other ways. These earnings are subject to taxation in accordance with the Income Tax Act's requirements. While not all forms of income are exempt from taxes, some do not fall under this category but they do have distinct requirements. This exempts some forms of income from taxes. Come on, tell us about the many forms of income that are exempt from taxes and the income tax regulations that apply to them.

How many different kinds of income in India are exempt from taxes?

revenue from agriculture

According to the Income Tax Act, income from agricultural activity is exempt from taxes. It is crucial to remember that profits from businesses that are connected to agriculture, including the selling of agricultural products, are subject to taxes.

Presents and Successors

In general, gifts obtained via wills, inheritances, or other special events are not taxable as income. There is a limit on the amount of gifts that are tax-free, but there is also an exemption.

Interest on EPF and PPF was received.

Taxes are not applied to interest received on investments made into Employees Provident Funds (EPF) and Public Provident Funds (PPF). Popular tax-free long-term savings options include EPF and PPF.

Payout

In the recipient's hands, dividends from stocks and mutual funds investments are tax-free. Nonetheless, dividend distribution tax must be paid by the distributing business.

Long-term profits on equity capital

Profits from the sale of stock shares held for more than a year are not subject to taxation. Short-term capital gains, however, are taxable.

This will be done in response to providing false information about income.

However, you might find yourself in serious trouble if you seek to conceal or save money on taxes in the incorrect way. Regarding this, the Income Tax Department has previously sent out a warning. Should someone do any such job, they will be subject to a fine from the Income Tax Department. A penalty on the whole amount of tax evaded may be applied in the event of tax fraud.

Recognize that under the Income Tax Act, there is a penalty provision for every error made by the taxpayer. A taxpayer may attempt to lower their tax due by underreporting or misreporting their income, in which case they may be subject to a penalty under Section 270A. The Income Tax Department levies penalties for underreporting and misreporting income in addition to fines for non-payment of self-assessment tax, failure to file an income return, failure to pay taxes, and other infractions.

The Income Tax Department is going to do this.

Income Tax states that penalties ranging from fifty to two hundred percent might be applied to the total amount of taxes avoided. False information on an income tax return may result in a penalty up to 200 percent of the tax due or any concealed sum, as stated in Section 270A.

On the other hand, there will be a 50% penalty on the liability or concealed amount if the separate income is underreported for any other reason. Furthermore, according to the IT department, the employers of these taxpayers will also be notified that the employee is submitting incorrect income tax forms.

The case of income misrepresentation includes all of these items as well.

Giving erroneous information or keeping it hidden

Providing inaccurate investment records

Exaggerated inference without providing evidence

Any erroneous account book entry

Not provide documentation of any foreign or particular transaction