ITR Filing 2026: Big news for taxpayers. As the season for filing income tax returns (ITR) approaches, people start looking for ways to save tax. Most taxpayers are focused on investing to earn tax breaks or claim deductions. However, few people know that under Indian tax rules, there are certain types of income that are tax-free from the outset. This means that no tax is required to be paid to the government on this type of income. If you also want to manage your income effectively and reduce your tax burden, you should definitely know about these tax-free sources.
Full exemption on income from farming
Under Section 10(1) of the Indian Income Tax Act income from farming in India is completely free from tax. This includes income from farming selling crops renting out land and other farming activities. The government wants to support farming in India and help farmers so farming income is not counted in taxable income. However if an Indian citizen earns income from farming land outside India it will be taxed according to tax laws. Gifts from relatives and wedding gifts.
Tax rules say gifts from relatives are tax-free
According to tax rules, gifts received from close and established relatives are tax-free. Gifts from legally defined relatives, such as spouses, parents, siblings, or in-laws, are completely tax-free, regardless of their value. Furthermore, there’s another special occasion when gifts from non-relatives are also tax-free: a wedding. Cash or other gifts received from friends or others at a wedding are tax-free. However, if you receive a gift or cash from a non-relative on a regular basis and its total value exceeds Rs 50,000, it becomes fully taxable and tax is payable.
Inherited or given property
The wealth or property that a person’s legitimate heirs inherit after their passing is entirely tax-free. Because the Income Tax Act exempts assets inherited through a bequest or inheritance from the tax regulations on gifts, there is no tax due on inherited property. As a result, whatever you inherit from your parents or ancestors—such as a home, jewellery, or cash—is not taxable. It’s crucial to remember that any additional income you receive from inherited property—such as interest on a bank account or rent from a residence that was bequeathed—will be subject to full taxation.
Interest in special savings plans such as Sukanya Samriddhi and PPF
There are some government and select savings schemes in India where the interest and maturity proceeds are completely tax-free. For example, schemes like the Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana (Samriddhi Yojana) are included. Investing in these schemes not only provides tax exemption, but the annual interest and maturity proceeds received upon completion of the scheme are also completely tax-free. However, the full benefits of these schemes are only available if you withdraw the funds after the maturity period. If you make a premature withdrawal, you may face tax or penalties in some cases.