Difference between 'Exemption','Deduction','Relief'

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Savita (Querist)
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10 August 2010 Please Explain the Meaning and Difference between the following terms:
Exemption, Deduction and Relief.

Thank you.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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10 August 2010
Exemption: Income not taxable at all

Deduction: Reduction from the taxable Income

Relief:Some relaxation on payment of tax or taxability on Income

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srinath

srinath (Expert)
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10 August 2010 good explanation by rameshji

eg
exemption : agricultural income

deduction: section 80C

Relief: section 89(1)

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CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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11 August 2010 Good answer by CMA Ramesh.

Further :

1. Exemtpions are given in the Income Tax Act which are thrust areas of the government (i.e. the areas which the government wishes to boost the particular segments) and/or the earning body is a weaker section of the society and/or requires growth in those activities

2. Deductions are given to boost savings for social welfare and other activities with which the country will be able to get strength in the desired fields.

3. Relief is given when double taxation is there or undue hardship to the taxpayer is there.

These are the major concepts behind the above terms.

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