How to make tax free money in india

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Last updated: 31 July We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners. Many providers in the US offer transfer services to India, but your recipient could be on the hook for a gift tax as regulated by the Indian Income Tax Act. Send fee-free transfers to over countries worldwide. Transfers in 55 currencies. OFX supports major, minor and exotic currencies. Flexible options. Choose from forward contracts to scheduled transfers for convenience and flexibility. Customer support.

Failing to file could land both you and your recipient in tax trouble.

Larger transfers get personalized service over the phone. Make sure to declare any large remittance as income on your general tax return with the Indian Income Tax Department. To avoid the severe penalties that could come with a failure to report large sums of money into the country, speak with a professional to guarantee that everything is above board and complies with the laws of both the US and India.

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We may be roughly three months past Tax Day, but it’s never too early to begin thinking about ways to reduce your taxable liability to Uncle Sam. Image source: Getty Images. You see, getting a refund from the government isn’t necessarily a good thing. While a tax refund can be viewed as a way to force savings among Americans who lack proper plans to save, it also means you’ve overpaid on your taxes, and have essentially given the government an interest-free loan with your hard-earned money. Realistically, your goal each year should be to minimize the amount of tax you have to pay to the IRS. The best possible scenario would be to simply not pay any taxes at all. With this best case in mind, let’s look at seven ways you can legally earn or receive tax-free income. The Roth is a retirement account that allows the money you contribute to grow completely free of taxation so long as you make no unqualified withdrawals.

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Paying Income tax is one thing, which most of the people do not like. Everyone tries to minimize their income tax by some or the other means. Yes, you heard it right. This article is mainly for information purpose because I have seen many investors who are yet not clear on the taxation rules of a few incomes. Here we go:. From onwards, a new section 80 TTA is introduced under which, the interest on your saving bank account up to Rs 10, is not taxable. So if your saving bank interest for a year is Rs 20,, then out of that Rs 10, is exempted and only the rest Rs 10, will be added to your taxable income. This is a great relief for tax-payers because it was really a big headache to find out the saving bank interest from all the accounts and add them up and pay income tax because, for most of the people, it would be few hundreds or thousands of interest income. Now that is gone! Here we are talking about both, the Fixed Deposit and normal saving bank interest. Both of them are tax-free for NRI. And the best part is that the money in NRE accounts is repatriable which means if you are in the US and you invest some money in India in your NRE account, the principle and interest money can be taken back to the US. If a partnership firm earns some profit and instead of retaining it within the partnership firm, it has paid to the partners as a share of profits, then it is tax-free in the hands of the partne r, because the tax is already paid by the firm on it. Example — If A and B are partners in a firm.

This article educates you to save money through various tax free income sources.

Scholarships and Awards: Any scholarships, awards are exempted from tax as long as the institution where you receive such compliments is legally registered and a recognized body. Caution: The provision is exempted to only SEBI registered affiliates and some financial institutions set by public or private sector banks authorized by RBI. Val December 10, Staff. Hello Jane, Thank you for your comment. A mutual fund is a kind of an investment scheme, usually run by some asset management company where a group of people invested their money in stocks, bonds, and other securities. Using a reputable provider can safeguard you from potential scams. Close relatives are your father, mother, own sister, own brother, spouse, any lineal ascendant or descendant etc. Joshua October 13, Staff. You should provide the proof for the asset if received on the date of your marriage. Become a Great Blogger in Download our free Ebook.

Failing to file could land both you and your recipient in tax trouble.

In this corner there was once a massive wardrobe. Leah Fallon. You have successfully joined our subscriber list. Because the company had paid the necessary taxes already to the government and hence it is not necessary again to pay one more time. Hi Pankaj, Thanks for getting in touch with finder. Leah Fallon is an editor for finder. On the other hand, some people hesitate to pay Income tax on their hard earned money. As the monthly wages are not enough to manage expenses, the income tax eats a considerable portion of your income which many people hesitate to pay. All opinions and reviews are my. While we are independent, the offers that appear on this site are from companies from which finder.

Here are the strategies you can employ to reduce your tax liability by making the most of opportunities offered by tax laws.

Right, Yes, we live in India and as per the constitutional law, we are liable to pay tax on our Income. I thought to write this small list of the tax free income source in India to help minimize your tax burden.

The March month is always a special month of the year because all the companies and individuals who fall under tax slabs should have to file tax based on their income? Everyone has to koney income tax, even though most of the people do not like to pay taxes. They find some other possible ways to hide their income to minimize their tax. People need money for their living and to earn money, people should go for a work or do any online jobs from the comfort of their home. And once the income crosses the tax limit, you have to no choice unless pay tax.

The government collects tax from every individual based on their earnings because tax helps to build the nation. On the other hand, some people hesitate to pay Income tax on their hard earned money. This indi a curiosity in me to write this article to share some of the tax free income sources to save money. If you earn money from these sources, then you are not liable to pay taxes to the government. This article is for informational purpose only and you should know the income tax rules clearly.

It is a kind of a compulsory contribution to the central monwy state government by the citizen, levied by the government on the income from the salary or a business profit or a commission on a sale or from the lotteries, games.

There is a law to regulate the collection of taxes under the various schemes and indiaa controlled and monitored by a board called as Income Tax Department of India. Every individual whether male or female, whose gross total income in a financial year exceeds Rs. This limit is Rs. Every individual is working to earn money and similarly, governing bodies need finances to run the government.

The sole purpose of the tax is to fund all the government expenditures and to provide various public services such as transportation, basic amenities including roads, street lights, street cleaning. The funds collected from the tax will also be used to increase arms and develop defense security of the country and other welfare work.

One financial year is accounted from 1st April of the previous year to the 31st March of the concurrent year. We are not going into deeper as our main focus on this article was to discuss about various free non-taxable free income sources. Although tax payment is good for the development of a country but as an individual when it comes to paying tax we usually hesitate. But there are some ways to increase your income which are non-taxable.

Thinking… Yes, that is true! The Government of India have declared tax exemption to a certain class of income and we are further going to read these sources in this article. When accounting this income, it is enough to pay tax only for Rs.

This is a great saving and a source of tax free income for all tax-payers. Most of the people usually have more than one savings in a different branch of the same bank or entirely different bank, and you can sum up all interest together before assessing for tax liability.

Both fixed deposit and savings bank interest are eligible to claim no-tax on every fiscal year. As an NRI, you enjoy huge tax savings using this idea. Any scholarships, awards are exempted from tax as long as the institution where you receive such compliments is legally registered and a recognized body.

Educational scholarships, fellowship awards, and grants are also treated as the tax free income source. This criterion applies to the awards and rewards indja by the government or any other body approved by central or state government.

When A and B are joined together and running a business firm and if the company earns a pure profit in a fiscal year, instead of retaining it, if it is paid to both the partners as the share of profits, then it is considered as a free taxable income.

Because the company had paid the necessary taxes already to the government and hence it is not necessary again to pay one more time. This is eligible for the senior citizens over 60years of age, who suffer from monthly cash flow requirements. The money they receive from mortgaging will be treated as tax-free and only residential properties can be reverse mortgaged.

Under no circumstances, all the income that is jake from agricultural land in India is completely exempted from tax.

Either they earned by crop cultivation or in the form of rent or in the form of a lease or any revenue gained by selling their agricultural land are all non-taxable. Monsy if you generate income through a small farmhouse like maintaining a nursery selling seeds and saplings are also considered as agricultural income and exempted from tax.

The gross salary of every employer consists of various components where they can use to claim tax exemption. In them, LTA allowance was the hwo which is not liable to tax every fiscal year. This allowance is provided by the employer to the employee every year and while accounting for tax, if you provide the proof of travel, you can save up to Rs.

So every time, when you sign your salary slip, take a look at the LTA component of your slip else to ask your employer to restructure your salary. If your yearly take-home salary twx Rs. Travel allowance is a source of tax free income for every employer and the maximum limit in a fiscal year is Rs. The employees who work for a public sector company or an authorized established under the control of central or state government is eligible for this income.

Provident funds are compulsory for every employee working for a company. It is an indirect saving for them while working. As your age grows, your savings will also grow proportionately with time. After your retirement, you can earn this PF money as one single big settlement which is fee from tax. Else if you changing your company after a period of 5Yrs, and you want to close your PF, then the money provided is tax-free only after the 5Yrs lock-in period.

All the income from the government authorized provident funds, recognized fund departments are considered as free tax income. A mutual fund is a kind of an investment scheme, usually run by some asset management company where a group of people invested their money in stocks, bonds, and other securities. The investment is for a fixed period of time starting from one month to many years. There are two types of income you can generate from mutual funds: One long-term capital gain LTCG and the other one was generating dividend income among shareholders.

It works very simply, you have to find SEBI registered traders in your locality and invest some capital with. They, in turn, use your investment to invest in various sources and bring you back the returns.

Caution: The provision is exempted to only SEBI registered affiliates and some financial institutions set by public or private sector banks authorized by RBI. Any money you get as a gift on your marriage or any mke occasion from your friends, relatives or maks third person will be treated as a non-taxable income source for you.

Even expensive gifts such as Gold are also considered as a non-taxable asset. You should provide the proof for the asset if received on the date of your marriage. Gifts you received from your friends or distant relatives has a monetary value of Rs. But there is no limit for gifts from close relatives.

Monwy relatives are your father, mother, own sister, own brother, spouse, any lineal ascendant or descendant. Think if your father wants to buy you a brand new car, ask him to hold for a indja and gift it to you on your marriage occasion will save you a lot of taxes. The money spends to purchase the car, say Rs. If your ancestors have written a WILL putting your name as their nominee after their life, then the property or asset will be yours and completely non-taxable.

Now, when you invest that money or use the property to generate, only the interest part will be taxed. Any income earned as an interest received from securities, bonds, annuity certificates, savings certificates are also treated as tax free income. Any dividend income you receive on your stocks is tax-free in your hands. There is a limit on the net value of dividends in atx financial year not exceeding Rs. The dividend that you receive should be from a registered Indian Company.

However, the company pays the dividend distribution tax to the government before giving to its shareholders. The money received as compensation to the ta in case of company closure is considered as tax-free. If you are a member of HUF maoe assuming you receive any sum of income, such amount will not liable to tax in your hands. To achieve this dream, they go for a job or do some kind of business to earn money.

In India, all component of income is taxable and as a good citizen, you should do your duty to the country by paying tax on your income. As the monthly wages are not enough to manage expenses, the income tax eats a considerable portion of your income which many people hesitate to pay. I have covered a few portions of tax free income sources researched based on my knowledge to enhance our community hoq.

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Become a Great Blogger in Download our free Ebook. This article educates you to save money through various tax free income sources. Pay tax to contribute your growth to our country. What is Tax? Who are liable to file income tax? Why Are Taxes Collected? When to Pay taxes? Different tax free income sources: Although tax payment is good for the development of a country but as an individual when it comes to paying tax we usually hesitate. Scholarships and Awards: Any scholarships, awards are exempted from tax as long as the institution where you receive such compliments is legally registered and a recognized body.

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As you indi to file your income tax return for the tqx, check out if any of your income falls in the lists of income tax exemption. In case it does, tax department would not be able to take away their customary share from it. Some of incomes that are exempted from tax are listed. Gifts received from relatives: Gifts received by relatives are fully exempted from income tax.

Income tax on gifts: Know when your gift is tax-free

The list of relatives is given by income tax department which includes spouse, brother or sister, ascendant of an individual. There is no limit on the value of gifts received under this category. All gifts received will be exempted. Aggregate value of the gifts received is less than Rs. But if the value exceeds Rs. Gifts received on occasion of marriage: Hoq received by an individual on occasion of his own marriage then the gifts are exempted from tax. It should be notified that the gifts that are exempted from tax should be received by an individual on his own marriage not from marriage of his daughter, son, brother or sister. Tax on property received as a gift: There are two cases under this category:. Check Offers. Tax Free Income in India — Best ways to earn As you prepare to file your income tax return for the year, check out if any of your income falls in the lists of income tax exemption. Agriculture income is exempted under section 10 1 of Income Tax Act. Even income from activities such as poultry and cattle rearing is considered as agricultural income. However, regular return of income tax needs to be filed and the agriculture income needs to be declared in the .