Page 104 - DCOM301_INCOME_TAX_LAWS_I

Unit 4: Exemptions and Deductions - I

38. Income from transfer of units of UTI [Section 10(33)]: Any income arising from the transfer Notes
of a capital asset, being a unit of the Unit Scheme, 1964 referred to in Schedule I to the Unit
Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) and where the
transfer of such asset takes place on or after the 1st day of April, 2002 shall be exempt from
income tax.
39. Any income by way of dividends referred to in Section 115-O [Section 10(34)]: Any income
by way of dividends referred to in Section 115-O shall be exempt from income tax. As per
section 115O the company paying or declaring any dividend have to pay tax @15% plus
surcharge 5% plus education cess @3% on such dividend. Hence, such dividend shall be
exempt in the hands of shareholders.
40. Income from Mutual Funds and certain units [Section 10(35)]: Any income by way of:
(a) income received in respect of the units of a Mutual Fund specified under Clause
(23D); or
(b) income received in respect of units from the Administrator of the specified
undertaking; or
(c) income received in respect of units from the specified company shall be exempt
from income tax.

This clause shall not apply to any income arising from transfer of units of the Administrator
of the specified undertaking or of the specified company or of a mutual fund, as the case
may be.
41. Income from subsidiary company [Section 10(40)]: Any income of any subsidiary company
by way of grant or otherwise received from an Indian company, being its holding company
engaged in the business of generation or transmission or distribution of power if receipt
of such income is for settlement of dues in connection with reconstruction or revival of an
existing business of power generation shall be exempt from income tax.
42. Income from transfer of a capital asset [Section 10(41)]: Any income arising from transfer
of a capital asset, being an asset of an undertaking engaged in the business of generation
or transmission or distribution of power where such transfer is effected on or before the
31st day of March, 2006, to the Indian company notified under sub-clause (a) of clause (v)
of Sub-section (4) of Section 80-IA shall be exempt from income tax.

Self Assessment

Fill in the blanks:

5. Any sum received by an individual in his capacity as a member of H.U.F. is
………………………. exempt from income-tax.
6. Share income of a person being …………………. of a firm which is separately assessed as
such is exempt from tax.
7. Allowances or perquisites paid or allowed as such outside India by …………………….. to
a citizen of India for his services rendered outside India, would be wholly exempt from
income-tax.
8. As per ……………………. the amount of tax actually paid by an employer, at his option, on
non-monetary perquisites on behalf of an employee, is not taxable in the hands of the
employee.

9. The provident fund set-up by the Central Government and notified by it in the Official
Gazette is known as ……………………..

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