Tax Ready Reckoner

Section 10(6BB) of the Income Tax Act, 1961 provides a tax exemption to foreign governments or foreign enterprises on income earned from leasing aircraft or aircraft engines to Indian companies. This exemption applies when the Indian lessee (company) pays the tax on behalf of the foreign entity under an approved agreement. Key Features of Section 10(6BB) Eligible Entities: Government of a […]

Overview of Section 10(6C) Section 10(6C) provides a tax exemption to foreign companies on income received as: Royalty(payments for use of patents, copyrights, trademarks, etc.) Fees for Technical Services (FTS)(technical know-how, consultancy, etc.) when the Indian payer (Government or Indian concern) bears the tax liability under an approved agreement. Key Conditions Applicable Period: Agreements made between 1st June 2002 and 31st March

Section 10(6D) provides a tax exemption to non-residents (other than foreign companies) on income received as: Royalty(payments for use of patents, copyrights, trademarks etc.) Fees for Technical Services (FTS)(consultancy, technical assistance etc.) when the Indian payer (Government or Indian concern) bears the tax liability under an approved agreement. Key Conditions Applicable Period: Agreements made between 1st June 2002 and 31st March 2024

Understanding Section 10(7) Section 10(7) provides a complete tax exemption for: Allowances Perquisites paid outside Indiaby the Indian Government to its citizen employees for services rendered outside India. Key Features ✔ Applicable to: Indian government employees (including diplomats, military personnel, scientists etc.) ✔ Location Requirement: Services must be rendered outside India ✔ Payment Condition: Allowances/perquisites must be paid outside India ✔ Exemption Scope: 100% exemption on such foreign-paid

Understanding Section 10(8) Section 10(8) provides tax exemption for income received by: Foreign technicians/experts Employees of foreign governments/international agencies working in India under bilateral technical assistance programsapproved by the Indian government. Key Features ✔ Who Can Claim?: Foreign government employees Technical experts from international agencies (UN, World Bank etc.) Their family members (limited cases) ✔ Exempt Income Types: Salaries Allowances

Understanding Section 10(8A) Section 10(8A) provides full tax exemption on remuneration received by: Non-Indian citizens working for specified international organizationsin India. Key Features ✔ Who Can Claim?: Foreign nationals (non-Indian citizens) Employees/consultants of approved international bodies ✔ Covered Organizations: United Nations (UN) & its specialized agencies (WHO, UNICEF, etc.) World Bank, IMF, ADB Other organizations notified by Central Government ✔ Exempt

Understanding Section 10(8B) Section 10(8B) provides tax exemption for income received by: Foreign employees Foreign consultants working in India under approved technical assistance programsfunded by: ✔ Foreign governments ✔ International agencies Key Features ✔ Who Can Claim?: Non-resident individuals Foreign government employees Experts from international organizations ✔ Exempt Income Types: Salaries Consulting fees Allowances Any program-related remuneration ✔ Approval Requirement: Must

Understanding Section 10(10) Section 10(10) provides tax exemption on gratuity payments received by employees. Gratuity is a lump sum amount paid by employers as a reward for long service. Key Features ✔ Who Can Claim?: All employees (government and private sector) ✔ Exemption Limits: Vary for different categories of employees ✔ Purpose: Retirement benefit for long-term service Types of Gratuity

Understanding Section 10(10A) Section 10(10A) provides tax exemption for commuted pension amounts received by employees. Commutation refers to exchanging a portion of monthly pension for a lump sum payment. Key Features ✔ Who Can Claim?: All pensioners (government and private sector) ✔ Exemption Limits: Vary for different categories of employees ✔ Purpose: Provides liquidity option for retirees Types of Pension

Section 10(10AA) of the Income Tax Act, 1961 provides important tax exemptions for leave encashment (also called leave salary) received by employees. This provision has undergone significant changes in recent years, most notably with the increase in exemption limits in Budget 2023. Let me explain this section in detail with practical examples to help you