Allowances and deductions under section 10 in India 2019-2020 – Income Tax Act 1961

Section 10 of Income Tax Act

Sections Particulars Exemption limit

Sec 10(1) Agricultural Income (from agricultural land, farm house, or sapling Fully exempt from tax
seedling grown in nursery) for self employed

Sec 10(2) Income received from HUF (Hindu-undivided family) by a tax Fully exempt from tax
payer in his capacity as a member of HUF

Sec 10(10C) Compensation received at the time of voluntary retirement for Exempt from tax up to a certain limit of
salaried employees compensation amount Rs. 5,00,000

Sec 10(10D) Amount received under life insurance policy including policy Fully exempt from tax
bonus

Sec Amount withdrawn from Provident fund by salaried employees Fully exempt from tax
10(11)(12)

Sec Compensation received in case of any disaster from central Fully exempt from tax
10(10BC) government

Sec 10(13A) House rent allowance (HRA) to salaried employees (rent paid by Fully exempt from tax and 50% of salary
the employees to stay in a rented house) amount if residential house is in metro
cities otherwise 40% in non-metro

Sec 10(14) Children education allowance (salaried employees can claim a pre Exemption up to Rs. 100 per month per
defined allowance for two children) child

Sec 10(14) Special compensatory allowance for hilly areas or climate Exemption up to Rs. 7,000 per month
allowance or high altitude allowance to salaried employees

Sec 10(14) Border area allowance or remote area or any disturbed area Exemption up to Rs. 1,300 per month

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rule 2BB allowance to salaried employees

Sec 10(14) Tribal area allowance in: Madhya Pradesh, Tamilnadu, Assam, UP, Exemption up to Rs. 200 per month
Karnataka, West Bengal, Bihar, Orissa and Tripura to salaried
employees

Sec 10(14) Compensatory field area allowance available in various areas of Exemption up to Rs. 2,600 per month
AP, Manipur, Sikkim, Nagaland, HP, UP and J&K to salaried
employees

Sec 10(14) Transport allowance granted to employee for the purpose of Exemption up to Rs. 1,600 (Rs. 3,200
commuting from home to office salaried employees for blind, deaf and dumb) per month

Sec 10(15) Income from tax free securities to all assesses (Income received as Fully exempt from tax
interest from securities, bonds, deposits notified by government)

Sec 10(23D) Income from mutual fund (Any income earned from mutual funds Fully exempt from tax
registered under SEBI or set-up by any PSU or authorized by RBI)

Sec 10(34) Income from dividends (Tax paid by the company over the profits Fully exempt from tax
is considered as the final payment of tax no further credit to be
claimed as dividends)

Sec 10(38) Long term capital gains on transfer of shares and securities Fully exempt from tax

Sec 10(43) Reverse Mortgage (Any amount received by the individual as loan Fully exempt from tax
in lump-sum or in installments in transaction of reverse mortgage)

Sec 10(44) New Pension System exemption (Any income received by any Fully exempt from tax
person on the behalf of New pension system)

Sec 10(49) Income of National financial holdings company Fully exempt from tax

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Source: IT Department

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