Difference between exemption and deduction

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Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2014 What is the difference between exemption and deduction of the Income-tax Act,1961. Both the provisions behave almost same manner. What is practical difference between them. what is the necessity to make two different types of provisions in the income-tax Act? how to understand this particular section would be called as deduction or exemption?

Nikhil Kaushik

Nikhil Kaushik (Expert)

24 June 2014 exemption is given against an income...deduction is given for an expense...for eg, chapter 80C is deduction for payments made...agriculture income though is exempt from taxation.

Rupesh Jain

Rupesh Jain (Expert)

24 June 2014 exemption : like any income or allowance is exempt from taxation like in section 10, 10A,10B, 10BA, 13A some income and amount exemption criteria is given. this in under the income taxable head of income where income not include in particular taxable head.

deduction: section 80 C to 80U under this your total income will be deduction in particular situation like u/s 80U and for investing like u./s 80C, payment like donation u/s 80G, 80GGB, 80GGC

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