Income Tax Benefits Available to Individuals and HUF - Part 1

Neethi V. Kannanth | Last updated: 22 May 2021

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This article explores the income tax benefits available to individuals and Hindu Undivided Families (HUFs) under the Income Tax Act. It details the basic exemption limits for different age groups, including senior and super senior citizens, and explains the rebate available for those with incomes up to Rs. 5,00,000. The article also lists various types of income that are exempt from tax, such as amounts received from HUFs, partnership firms, and certain interest payments.

Under the provisions of Income Tax Act various benefits are provided to Individuals and HUF. Through this article and my next few articles let us discuss and understand about the benefits available. First let us understand about basic exemption limits and relief available to Individual and HUF

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FAQ :

For AY 2022-23, the maximum amount not chargeable to tax for individuals and HUFs is Rs. 2,50,000. Senior citizens (60-80 years) have a limit of Rs. 3,00,000, and super senior citizens (80+ years) have a limit of Rs. 5,00,000.

A rebate is available under Section 87A for resident individuals whose total income does not exceed Rs. 5,00,000. The tax payable is subject to a maximum rebate of Rs. 12,500.

No, the share of profit received by partners from a partnership firm is entirely exempt from tax under Section 10(2A).

Interest on money in a Non-resident (External) account in India is entirely exempt for individuals resident outside India and those permitted to maintain such an account by the RBI, as per Section 10(4)(ii).

For employees not covered by the Gratuity Act, 1972, the exempt amount of gratuity is the least of: 1/2 times the average salary multiplied by completed years of service, Rs. 20,00,000, or the gratuity actually received.

Yes, compensation received from the Government or a Local Authority for any disaster is exempt from tax, except for the amount allowed as a deduction for losses caused by that disaster, under Section 10(10BC).