Income Tax Exemptions in India — Section 10 List
Updated: 3 June 2026
Section 10 of the Income-tax Act, 1961 lists incomes that are fully exempt from tax — they are not included in total income at all. Key exemptions: agricultural income (S.10(1)), House Rent Allowance (S.10(13A)), Leave Travel Allowance (S.10(5)), gratuity up to ₹20 lakh (S.10(10)), PPF/EPF maturity (S.10(11)/S.10(12)), life insurance maturity under conditions (S.10(10D)), scholarships (S.10(16)), and minor child income up to ₹1,500 per child for two children (S.10(32)). Note: Many exemptions — especially HRA and LTA — are not available under the new tax regime.
Section 10
Section 10 of the Income-tax Act contains the complete list of fully exempt income items — income that is never added to your taxable income.
Major Section 10 Exemptions — FY 2025-26
| Section | Income Type | Condition / Limit | New Regime? |
|---|---|---|---|
| 10(1) | Agricultural income from Indian land | No limit (partial integration if non-ag income exists) | Yes — exempt |
| 10(5) | Leave Travel Allowance (LTA) | Actual travel fare; 2 journeys in 4-year block | No — removed |
| 10(10) | Gratuity received | Up to ₹20 lakh (govt employees: fully exempt) | Yes — available |
| 10(10A) | Commuted pension (govt employees) | Fully exempt for government employees | Yes — available |
| 10(10AA) | Leave encashment on retirement | Up to ₹25 lakh (non-govt); unlimited for govt | Yes — available |
| 10(10D) | Life insurance maturity proceeds | Premium ≤ 10% of sum assured; or death claim (unlimited) | Yes — available |
| 10(11) | PPF account maturity / withdrawal | No limit — fully exempt (EEE status) | Yes — available |
| 10(12) | EPF withdrawal after 5 years of service | Fully exempt; taxable if withdrawn before 5 years | Yes — available |
| 10(13A) | House Rent Allowance (HRA) | Min of: actual HRA / rent−10% basic / 50% or 40% basic | No — removed |
| 10(16) | Scholarship / stipend for education | Any amount — fully exempt | Yes — available |
| 10(17) | Daily allowance to MPs/MLAs | Prescribed amounts | Yes — available |
| 10(32) | Minor child income clubbed with parent | ₹1,500 per child, max 2 children | Yes — available |
| 10(34) | Dividend from domestic companies | Removed — dividends now taxable at slab rates | Taxable |
| 10(38) | Long-term capital gains on listed equity | Removed — LTCG >₹1.25L now taxable at 12.5% | Taxable |
Exemptions Available Under the New Tax Regime
The new tax regime (Section 115BAC) offers lower slab rates but removes most exemptions and deductions. However, several Section 10 exemptions continue to apply under the new regime:
Available in new regime: Standard deduction (₹75,000), NPS employer contribution (S.80CCD(2)), gratuity (S.10(10)), EPF/PPF maturity, leave encashment on retirement, life insurance maturity (S.10(10D)), retrenchment compensation, voluntary retirement (up to ₹5L), scholarship, and transport allowance for specially-abled employees.
NOT available in new regime: HRA (S.10(13A)), LTA (S.10(5)), professional tax deduction (S.16(iii)), all Chapter VI-A deductions (80C, 80D, 80E, 80G, 80TTA, etc.), and home loan interest deduction (S.24(b)) for self-occupied property.
Frequently Asked Questions
What is Section 10 of the Income-tax Act?
Section 10 of the Income-tax Act lists all categories of income that are completely exempt from income tax. These are incomes that are not included in the total income of a taxpayer at all — not just deducted. Examples include agricultural income (S.10(1)), HRA (S.10(13A)), LTA (S.10(5)), PPF maturity (S.10(11)), gratuity (S.10(10)), and life insurance maturity (S.10(10D)). Section 10 is a long section with over 50 sub-clauses covering various types of exempt income.
Is LTA (Leave Travel Allowance) exemption available in the new tax regime?
No. Leave Travel Allowance (LTA) exemption under Section 10(5) is not available if you opt for the new tax regime under Section 115BAC. LTA is one of the exemptions that were specifically removed under the new regime. If you have significant LTA benefits and travel frequently, this may be one reason to consider the old tax regime.
How much HRA is tax-free?
HRA exemption (Section 10(13A)) is the minimum of three amounts: (a) Actual HRA received from employer; (b) Rent paid minus 10% of basic salary; (c) 50% of basic salary (metro cities — Delhi, Mumbai, Chennai, Kolkata) or 40% of basic salary (non-metro cities). This exemption is available only under the old tax regime and only if you actually pay rent and do not own a house in the city of work.
Is PPF maturity amount tax-free?
Yes. The maturity proceeds of a Public Provident Fund (PPF) account are fully exempt under Section 10(11). This includes the principal, interest accrued, and the final maturity amount — all tax-free. PPF enjoys EEE (Exempt-Exempt-Exempt) status: the investment qualifies for 80C deduction, interest earned annually is tax-free, and the maturity amount is also exempt.
When is life insurance maturity taxable?
Life insurance maturity is exempt under Section 10(10D) if: (a) the annual premium does not exceed 10% of the sum assured (for policies issued on or after 1 April 2012); or 20% for older policies. If the premium exceeds these limits, the maturity is fully taxable. Also, for new high-value ULIPs and traditional plans with annual premium over ₹5 lakh (issued after 1 Feb 2021), maturity proceeds are taxable as capital gains. Death claims are always tax-free regardless of premium.
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