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exemption v/s deduction

(Guest)

hi frens...

can anybody tell me what is the difference between exemption and deduction ?????

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8 Replies

swati jain (PCC student) (78 Points)
Replied 19 August 2008

Originally posted by :subodh sharma
"	hi frens... can anybody tell me what is the difference between exemption and deduction ?????	"

Exemption means income shall not be added to your total income. it is absolutely not liable to tax but on the other side for deduction it will be included in the Gross Total Income thereafter according to section for deduction under chapter VI-A the eligible amount for deduction shall be deducted. so in nut shell we can say exemption will not included in the GTI but for deduction income shall be included in GTI threafte shall be deducted from GTI.

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CA Nitin Wadhwani (Chartered Accountant) (4469 Points)
Replied 19 August 2008

Yes He Is Correct

swati (ca) (82 Points)
Replied 20 August 2008

swati jain is correct

Prasad (CA Final) (140 Points)
Replied 20 August 2008

yaa, swati jain is correct..........

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 20 August 2008

Exemption is generally in the context of an income which is not includible and forming part of your Gross Total Income. Income may be classified as Exempt or Non-exempt Income. Only Non-exempt Income is taken into account to compute GTI and Exempt income is excluded fat the very initial stage.

However, deduction is available to the assessee having income and fulfilling the specific conditions which is a pre-requisite to avail such deduction. Deduction is to be applied if there is Gross Total Income after taking out the exempt income.

A deduction, irrespective of the nature of income may be available to the person based on the other conditions of investment etc while the exemption is available on the nature of income accrued to the assessee and it solely depends upon the nature of income.

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shankar (student) (97 Points)
Replied 20 August 2008

Originally posted by :swati jain

Hi Swati,

So thanks for giving the clarity abt deduction and exemption.

Originally posted by :subodh sharma

"
hi frens...
can anybody tell me what is the difference between exemption and deduction ?????
"

Exemption means income shall not be added to your total income. it is absolutely not liable to tax but on the other side for deduction it will be included in the Gross Total Income thereafter according to section for deduction under chapter VI-A the eligible amount for deduction shall be deducted. so in nut shell we can say exemption will not included in the GTI but for deduction income shall be included in GTI threafte shall be deducted from GTI.

(Guest)

Exemption never form part of Gross Total Income where as deduction is available against incomes which is included in Gross total income but eligiable for deduction on satisfaction of certain condition furthermore deduction is also available in respect prescribed expenses & on making qualified investment..