What is exempted income under the Income Tax Act?

Exempted income refers to certain types of income that are fully or partially exempt from tax under the Income Tax Act, 1961. These exemptions are provided to promote specific economic activities or to provide relief to certain categories of taxpayers. Some common examples of exempted income include agricultural income, certain allowances for government employees, dividends from domestic companies, income from specified mutual funds, and income of approved charitable trusts or institutions. However, it’s important to note that the exemptions are subject to specific conditions and limits prescribed in the Act.