Here is a comprehensive list of Exempt Incomes under the Income Tax Act, 1961 for the Financial Year (FY) 2025–26 (Assessment Year 2026–27):
Exempt income refers to income that is not included in the total taxable income and hence, not subject to tax.
Major Exemptions Under Section 10 of the Income Tax Act
| Section | Type of Income | Exemption Details |
| 10(1) | Agricultural income | Fully exempt if earned from land in India |
| 10(2) | Share of profit from HUF | Exempt in the hands of members |
| 10(10) | Gratuity | – Govt employees: Fully exempt – Others: Exempt up to ₹20 lakhs (conditions apply) |
| 10(10A) | Pension – Commuted | – Govt employees: Fully exempt – Others: Partial exemption |
| 10(10B) | Retrenchment compensation | Exempt up to least of: ₹5 lakh, actual received, or 15 days avg pay × years of service |
| 10(10C) | Voluntary Retirement (VRS) | Exempt up to ₹5 lakh (once in a lifetime) |
| 10(11) | Provident Fund – Statutory/Recognized | Interest and maturity exempt, subject to limits |
| 10(12) | Recognized Provident Fund | Employer contribution & interest exempt (limits apply) |
| 10(12A) | NPS partial withdrawal | Up to 25% of own contribution exempt |
| 10(13) | Approved Superannuation Fund | Lump sum on retirement exempt |
| 10(13A) | House Rent Allowance (HRA) | Exempt up to prescribed limit (least of 3 conditions) |
| 10(14) | Special Allowances | Exemption for travel, conveyance, uniform, education, etc. (up to limits) |
| 10(15) | Interest on specific investments | E.g., Tax-free bonds, PPF, Sukanya Samriddhi, Notified bonds |
| 10(16) | Scholarships | Fully exempt |
| 10(17) | MP/MLA Allowances | Daily and constituency allowance exempt |
| 10(18) | Gallantry awards | Param Vir Chakra, Maha Vir Chakra, etc. – fully exempt |
| 10(19) | Family pension for armed forces | Fully exempt if death occurred during operational duties |
| 10(23C) | Income of Charitable Trusts/Educational Institutions | Subject to conditions under 10(23C)(iv)-(viia) |
| 10(23D) | Mutual Funds | Income of registered MF exempt |
| 10(26) | Tribal area income (Northeast India residents) | For ST residents of certain regions |
| 10(34) | Dividend from Indian companies | Exempt in hands of shareholder (Dividend Distribution Tax abolished; TDS applies) |
| 10(38) | Long Term Capital Gains (LTCG) on equity shares (abolished from FY18) | Not applicable now, covered under section 112A |
Other Notable Exemptions
- Maturity proceeds from Life Insurance Policies(Section 10(10D))
- Fully exempt unless premium > 10% (or 20%) of sum assured or issued after Apr 2023 with large premiums.
- Leave encashment on retirement (Section 10(10AA))
- Govt: Fully exempt; Others: Up to ₹3 lakh (conditions apply)
- Income from Agniveer Corpus Fund(Section 10(12C))
- Fully exempt for Agniveers