Pls help...
I want to know if an exemption is provided for under Income Tax Act will it then be excluded from the purview of 'toatl income' entirely? Or is it only after the taxable income is determined that the question of an exemption is worked out?
it is excluded from the purview of 'toatl income'
it will not be added in total income
Tax law contains chapters dealing with incomes which do not form part of total income. There are chapters dealing with deductions and allowances. Chapter III refers to various incomes which are exempt from tax. It excludes certain types of income from the ambit of ‘total income’ as defined under the Income-Tax Act, 1961.
The incomes enumerated in Section 10 of the Act are not only excluded from the taxable income of the assessee but also from his total income. They are not to be taken into computation for determining the taxable income. By their very nature certain classes of income are entitled to exemption — agricultural income and income held under charitable trust are cases in point.
Chapter IV, on the other hand, deals with various heads of income and their computation. Chapter VIA deals with deductions to be made in computing total income.
The distinction between exemptions and deductions is crucial to an understanding of the computation provisions. Deduction is that which is deducted, the part taken away, an abatement. Deductions are made from gross income in arriving at the net income for tax purposes. Many of the deductions are itemised in detail under appropriate captions and subtracted to arrive at income subject to tax.
how much money is deducted from salary as income tax?
| Originally posted by :Lekha Balakrishnan | ||
| " | Pls help... I want to know if an exemption is provided for under Income Tax Act will it then be excluded from the purview of 'toatl income' entirely? Or is it only after the taxable income is determined that the question of an exemption is worked out? |
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Kindly let me know whether HRA payable to me can be deducted from the income, when I am living in own house and obtaining HBA deductions.
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