Non-Taxable Income

Non-taxable income refers to earnings that are either wholly exempt or only partly subject to tax as specified in the Income-tax Act. In other words, certain categories of income are not included in the taxable base, and in some cases only a limited portion is considered for tax purposes. Fully exempt items include things like agricultural income, interest earned on a Public Provident Fund, and scholarships. Others—such as HRA or gratuity—are exempt only up to statutory limits. Some of these exempt amounts still need to be disclosed in the income-tax return. Such provisions are intended to support savings, promote education, strengthen agriculture, and ease the burden on taxpayers.

Example:

For instance, if a student receives a scholarship of ₹1,00,000 or someone earns interest from a PPF account, these amounts are completely exempt and are not taxed.