Please let me know the difference between "Tax Exempt" and "Tax Free"? Do they mean the same thing?
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Tax exempt and tax free
Replies (6)
Both r same thing
But tax exempt & deduction r diff. Thing.
TAX Free income & TAX Exempt income look alike but with minute difference.
TAX Free means Zero tax .
Eg: Gift From relative, Dividend from domestic company
Whereas Tax Exempt may be totally exempt or Partially exempt
Eg : Lottery income tax free upto Rs.10000.
Tax free means that you will never be taxed on those incomes. tax exempt means that tax is applicable on those incomes but an exemption have been given to those incomes.
Totaly Agree with Phalgun ........
Tax free means there is no tax on such income/manufacture/sales..However tax exemption means tax is applicable first on such income/manufacture/sales & later on they are exempted from tax..eg..income from agriculture..
Thank You all for your replies.
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