Section 11 of the Income Tax Act 2025 outlines provisions for excluding certain incomes from total income, effective from April 1, 2026. Specifically, it states that incomes listed in Schedules II to VI are not included in total income, provided the conditions specified in these schedules are met. If these conditions are not satisfied in any tax year, such incomes become taxable for that year.
Additionally, persons enumerated in Schedule VII are exempt from tax, subject to fulfilling the conditions specified therein; failure to meet these conditions results in their income being taxed under the Act. The Central Government holds the authority to make rules or issue notifications pertaining to these provisions as specified in the relevant schedules.
Incomes not included in total income
[Section 11 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 11(1) of Income Tax Act 2025
11(1) In computing the total income of any person for a tax year under this Act, any income enumerated in Schedules II, III, IV, V, and VI shall not be included, subject to fulfilment of conditions specified therein.
Section 11(2) of Income Tax Act 2025
11(2) Wherever the conditions referred to in the Schedules referred in sub-section (1) are not satisfied in any tax year in respect of any income enumerated in the said Schedules, such income shall be charged to tax under this Act for that tax year.
Section 11(3) of Income Tax Act 2025
11(3) The persons enumerated in Schedule VII shall, subject to fulfilment of the conditions specified therein, not be chargeable to tax under this Act for a tax year.
Section 11(4) of Income Tax Act 2025
11(4) Wherever the conditions referred to in Schedule VII are not satisfied in respect of the persons enumerated in the said Schedule, the income of such person shall be charged to tax under the provisions of this Act.
Section 11(5) of Income Tax Act 2025
11(5) The Central Government may make rules or issue notifications for the purposes of this section as specified in the Schedules II, III, IV, V, VI and VII.
FAQs on Section 11 of Income Tax Act 2025
1. What incomes are not included in total income under the Income Tax Act, 2025?
Any income specified in Schedules II, III, IV, V, and VI of the Income Tax Act, 2025, is not included in total income, provided the specified conditions are fulfilled.
2. What happens if the conditions in Schedules II to VI are not met?
If the required conditions in these schedules are not satisfied in any tax year, the income that would have been excluded will be subject to taxation under the Act for that year.
3. Are there any persons whose income is not chargeable to tax?
Yes, persons specified in Schedule VII are not chargeable to tax, subject to the fulfillment of the conditions mentioned in the Schedule.
4. What happens if the conditions in Schedule VII are not satisfied?
If the conditions in Schedule VII are not met, the income of such persons will be taxed under the provisions of the Act.
5. Can the government make changes to these exemptions?
Yes, the Central Government has the power to make rules or issue notifications regarding exemptions and conditions specified in Schedules II, III, IV, V, VI, and VII.
6. Where can I find the specific conditions for exemption?
The conditions for exemption are detailed in Schedules II to VII of the Income Tax Act, 2025. Taxpayers should refer to these schedules or consult a tax professional for guidance.
7. Does Section 11 apply to all taxpayers?
Yes, Section 11 applies to all taxpayers, but the applicability of specific exemptions depends on whether they meet the conditions in the relevant schedules.
8. Is income from foreign sources excluded under Section 11?
It depends on the provisions mentioned in the relevant schedules. If foreign income qualifies under any of the schedules, it may be excluded from total income, subject to conditions.
9. Are exemptions under Section 11 permanent?
No, exemptions depend on fulfilling the conditions specified in the schedules for each tax year. If conditions are not met, the income will be taxed.
10. Can an individual or entity claim exemption under multiple schedules?
Yes, if an individual or entity meets the conditions of multiple schedules, they may claim exemptions accordingly. However, each claim must satisfy the respective schedule’s conditions.
11. How does the government notify changes in exemption rules?
The Central Government issues notifications and rules specifying amendments or changes in the conditions for exemptions under this section.
12. Are charitable organizations exempt under Section 11?
The exemption for charitable organizations depends on the provisions in the schedules. If an organization qualifies under Schedule VII (or any other relevant schedule), it may be exempt from tax.
13. How does the tax department verify compliance with exemption conditions?
The tax department may conduct audits, request documentation, or require taxpayers to provide evidence of compliance with the exemption conditions specified in the schedules.
14. Are exemptions under Section 11 applicable automatically?
No, taxpayers must ensure they meet the conditions specified in the relevant schedules. Non-compliance will result in taxation of the income.
15. Can the government remove any exemptions in the future?
Yes, the government can amend the provisions, remove exemptions, or introduce new conditions through legislative changes, rules, or notifications.
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