A negative list under income tax is a list of incomes that are exempt from taxation. This means that if your income falls within one of the categories on the negative list, you do not have to pay income tax on it.

The negative list under the Indian Income Tax Act, 1961 is quite extensive, and includes a wide range of incomes, such as:

• Agricultural income
• Income from lottery and betting
• Income from insurance
• Income from scholarships and prizes
• Income from pension
• Income from provident funds
• Income from gratuity
• Income from leave salary
• Income from house rent allowance
• Income from travel allowance
• Income from medical allowance
• Income from disability allowance
• Income from children’s education allowance
• Income from leave travel allowance
• Income from house building allowance

In addition to the above, there are a number of other specific exemptions that are available under the Income Tax Act. For example, there are exemptions for donations to charity, investments in certain types of schemes, and for certain types of businesses.

FAQ QUESTION

What is a negative list under income tax?

A negative list under income tax is a list of items that are not taxable. This means that if your income comes from one of the items on the negative list, you do not have to pay income tax on it.

The negative list under income tax is different from the exemption list. The exemption list is a list of items that are exempt from income tax under certain conditions. For example, income from agriculture is exempt from income tax up to a certain limit.

What are some examples of items on the negative list under income tax?

Here are some examples of items on the negative list under income tax in India:

• Agricultural income
• Income from house property that is self-occupied
• Income from lottery winnings
• Income from insurance policies
• Income from scholarships
• Income from provident fund and pension funds
• Income from dividends received from domestic companies

How do I know if my income is on the negative list under income tax?

You can check the negative list under income tax in the Income Tax Act, 1961. The Act is available on the website of the Income Tax Department of India.

What if I have income from an item that is on the negative list under income tax?

If you have income from an item that is on the negative list under income tax, you do not have to pay income tax on it. However, you must still disclose the income in your income tax return.

Can the negative list under income tax change?

Yes, the negative list under income tax can change from time to time. The government can add or remove items from the list through amendments to the Income Tax Act, 1961.

CASE LAWS

CIT v. R.K. Malhotra (2013) 350 ITR 551 (SC), the Supreme Court held that the term “income” under the Income-tax Act is to be interpreted in the widest possible sense and includes all receipts which are of a revenue nature. The Court also held that the onus of proving that a receipt is not taxable lies with the taxpayer.

In the case of CIT v. Gujarat Alkalies and Chemicals Ltd. (2004) 10 SCC 688, the Supreme Court held that the term “income” includes all receipts which arise from the carrying on of a business or profession, even if they are not in the form of cash. The Court also held that the question of whether a receipt is taxable is to be determined on the basis of the substance of the transaction and not the form.

These case laws suggest that the term “income” under the Income-tax Act is to be interpreted very broadly and that all receipts of a revenue nature are taxable, unless they are specifically exempted under the Act. Therefore, it is likely that any receipts from services that are not included in the negative list of services under the Income-tax Act would be taxable.

However, it is important to note that the interpretation of the term “income” is a complex issue and there is no clear consensus on all aspects of its interpretation. Therefore, it is advisable to consult with a tax professional to get specific advice on whether any particular receipt is taxable or not.