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Income Tax Laws – I Pooja, Lovely Professional University

Notes Unit 4: Exemptions and Deductions – I

CONTENTS
Objectives
Introduction

4.1 Agricultural Income
4.1.1 Conditions to be Satisfied for Agricultural Income
4.1.2 Partly Agricultural Income

4.2 Other Important Exemptions
4.3 Tax Exemptions for Charitable Trusts and Institutions
4.4 Income Not to be Included in the Total Income
4.5 Income from Voluntary Contributions (Section 12)
4.6 Income to be Included in Total Income

4.7 Tax Exemptions to Political Parties
4.8 Allowable Deductions from Gross Total Income
4.9 Summary

4.10 Keywords
4.11 Review Questions
4.12 Further Readings

Objectives

After studying this unit, you will be able to:

Define agricultural income and its tax treatment
Discuss the important Exemption in Income Tax Act
Describe the tax exemptions for charitable trusts and institutions

List down the Income not to be included in the Total Income
Elucidate the tax treatment for Income from Voluntary Contributions
Trace the Income to be included in Total Income
Explain the Tax exemptions to political parties

Introduction

Various tax systems grant a tax exemption and tax deductions to certain organizations, persons,
income, property or other items taxable under the system. Tax exemption refers to a personal
allowance or specific monetary exemption which may be claimed by an individual to reduce
taxable income under some systems. Tax exempt status may provide a potential taxpayer complete
relief from tax, tax at a reduced rate, or tax on only a portion of the items subject to tax.

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