What are exempt income, allowable expenses, and not allowable expenses?
What are exempt income, allowable expenses, and not allowable expenses?
Exempt income means an income on which you should NOT PAY any taxes on. Examples are Agricultural Income, Gift from Relatives and allowances upto the limit they are allowed, for eeg HRA and Travelling allowance.
Allowable expenses are those expenses which you CAN DEDUCT from your total Income. Ideally, if the income IS chargeable to tax, the expenses incurred to earn that income is ALLOWED for deduction from that income.
Not-Allowable expenses are those expenses which you CAN NOT DEDUCT from your total Income. Ideally, if the income is NOT chargeable to tax, the expenses incurred to earn that income is also NOT ALLOWED for deduction from that income.
