Question

What is the difference between tax free and non-taxable?

What is the difference between tax free and non-taxable?

Homework Answers

Answer #1
  • Although there is a very thin line of difference in tax free and non-taxable, both of them are assumed to be similar when it comes to income or tax computation.
  • Tax free is when tax is not required to be paid on goods or securities or those are exempt from payment of tax.
  • Example - tax free bonds, tax free earnings from securities etc.
  • Whereas, when income or assets are referred on which tax is not to be paid, such income or asset is called as not taxable.
  • Retirement Benefits, ex-gratia payments, export profits upto six years etc.
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