What is Income Tax Exemption in India?

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What is Income Tax Exemption in India?
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In India, income tax exemption refers to the
portion of an individual's income that is not
subject to taxation. The Indian Income Tax Act,
1961, provides various provisions under which
certain incomes or amounts are exempt from income
tax. These exemptions are designed to reduce the
tax burden on individuals and encourage savings
and investments in specific sectors of the
economy. Every individual is entitled to a basic
exemption limit up to which their income is not
taxable. Read our complete blog to know all about
the income tax exemption in India and its work.
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How does Income Tax Exemption work

• Income tax exemption works by reducing the
  taxable income of an individual, which in turn
  reduces the amount of tax that the individual is
  liable to pay to the government. Essentially,
  income tax exemption allows individuals to deduct
  certain amounts from their total income, which
  are not subject to taxation. This is done through
  various provisions and sections of the Income Tax
  Act, 1961, in India.

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Here's how income tax exemption works in a
simplified manner

• Determine Total Income
• Apply Basic Exemption Limit
• Deduct Investments and Expenses Under Section
  80C, 80D, etc.
• Calculate Taxable Income
• Calculate and Pay Income Tax

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