Purpose:
This section provides a tax exemption on payments received as awards, rewards, or prizes from:
- Central/State Government
- Approved bodies/institutions(as notified by the government)
The exemption applies only if the award is approved by the government and given in public interest (e.g., for achievements in science, arts, sports, etc.).
Key Conditions for Exemption:
✅ Must be a government-approved award (private awards are taxable).
✅ No monetary limit – the entire award amount is tax-free.
✅ Given in recognition of merit (not contractual payments).
Example 1: National Film Award (Government Award)
- Recipient:A filmmaker wins the National Film Award for Best Director.
- Prize Money:₹1,00,000 (given by the Government of India).
- Award Amount:₹1,00,000
- Taxable Income:₹0 (Fully exempt under Section 10(17A))
Example 2: Arjuna Award (Sports Award)
- Recipient:A cricketer receives the Arjuna Award for outstanding performance.
- Cash Prize:₹15,00,000 (given by the Ministry of Sports).
- Award Amount:₹15,00,000
- Taxable Income:₹0 (Exempt under Section 10(17A))
Example 3: Private Award (Not Exempt)
- Recipient:An author wins a private literary prize from a publishing house.
- Prize Money:₹5,00,000
- Award Amount:₹5,00,000
- Taxable Income:₹5,00,000 (Taxable under “Income from Other Sources”)
*(Since it’s not a government-approved award, Section 10(17A) does not apply.)*
Key Takeaways:
✔ Government Awards (e.g., Padma Awards, Gallantry Awards) = Tax-Free.
✔ Private Awards (e.g., Filmfare, IPL Cash Prizes) = Taxable.
✔ No upper limit – Even crores in prize money are exempt if approved.
