Section 10(38) with effect from FY 2004-05, any income arising to a taxpayer on account of sale of long-term capital asset being securities or equity mutual fund units is completely outside the purview of tax liability especially when the transaction has been subjected to Securities Transaction Tax (STT). So invest in any equity fund now, hold for a period of 1 year and reap tax free gains or start SWP (Systematic withdrawal Plan).

Under Section 10(10D), any sum received under a Life Insurance Policy (LIP), including the sum allocated by way of bonus on such policy, other than u/s 80DDA or under a Keyman Insurance Policy, or under an insurance policy issued on or after 1.4.2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20 per cent of the actual capital sum assured, is fully exempt from tax.

There are certain types of interest payments which are fully exempt from income tax u/s 10 (15). These are described below:

1. Income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificates, savings certificates, other certificates issued by the Central Government and deposits as the Central Government may, by notification in the Official Gazette, specify in this behalf.
2. Stipulated tax free bonds as notified from time to time