There are some types of Income that the tax department has given as not to pay taxes, if the income comes from these sources, we can have a small walk through these, as normally people loves saving tax and its high time that we know about the income excluded from tax.

Agriculture activity income is not treated as an income this can be more explained with the help of an example if your father gives you money from his agricultural income as a gift then you do not have to treat it as taxable income, but father should be a person who files his return.

Payments that are received under pension, death, retirement scheme, gratuity for a person or his widow, children or people who depend on him. In the case of gratuity it should not be more than the number of years in service multiplied half months salary which is based upon a ten month average.

You can receive an amount of Rs.5000 other than Gift and is not a payment that is recurring type can be excluded from your income. If you get money for travel from your company to any place in India along with your family and in leave, you can make the claim two times in a time period of four years. Keep the travel records safely in case for clarification by the IT dept.

If you have any income from being a partner in a firm which has already assessed then you need not include that income in your book. Any income that you get from the firm according to the partnership deed does not come under the tax net.

Compensation which is achieved at the time of retirement as earned leave, this is only for central and state government employers. For other employers the rule is that you can en cash up to a limit of ten months. It also suggest that the earned leave must not go beyond 30 days.

Compensation that is received for a workman when a company is closed or with the change in the management. Another option is VRS or Voluntary retirement an amount not exceeding to Rs 5 lakh at the time of the VRS, one condition is that the company that pays the VRS should have its rules in accordance with the government rules for VRS.

The amount that is received from a life insurance policy which includes bonus payments are not to be included in taxable income, here the exception is the amount of Key-man policies.

Provident Fund (PF) income are excluded from income. Payment that is made from superannuating fund on death, or a refund will not be counted. Payment that is made by the employer to the employee for the payment of rent for accommodation only for rented houses.

Earning that are from interest, redemption, premium, securities, annuity, bonds, savings certificates, and any other forms of instruments issued by the central government. Payments which is received as cash or in kind which is by the state or central government or any body by the central government. Educational Scholarships are not included. Amounts that are from the Prime minister’s national relief fund, students fund.

You can get your income diverted to any of these sources which can save you tax.

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