Which income is exempt from personal income tax? A natural person is obliged to tax the monetary! non-monetary and exchange income that he receives. He does not have to tax income that is exempt from personal income tax. Exempt income for natural persons can be found in Section 4! Section 4a and partly in Section 10 of Act No. 586/1992 Coll. on income taxes.
which-income is exempt Which income
Inheritance and gifts
Other exempt income
Exemption of income from crypto assets from 2025
Reporting exempt income
Inheritance and gifts
Income of a natural person received as an inheritance is telemarketing data exempt from income tax pursuant to Section 4a (a) of the Income Tax Act! regardless of the amount! family relationship or other conditions. A natural person does not have to pay income tax on inheritance and inheritance tax has been abolished.
The situation is different for income obtained through donations. Which income is exempt In the case of donations! it is necessary to distinguish between the purpose of the donation and the relationship between the donor and the donee. Free income for humanitarian or charitable purposes or from public collections is exempt from income tax.
Gifts received from a relative in the direct line (from parents! grandparents! children! grandchildren) and in the collateral line ! in the case of siblings! uncles! aunts! nephews or nieces! spouses! children’s spouses! children of spouses! parents of spouses or parents’ spouses! are exempt. Gifts from a person with whom the taxpayer lived for at least one year immediately before receiving free income in a jointly managed household and for this reason took care of the household or was dependent on this person for maintenance are also exempt.
As for gifts from other persons! gifts acquired occasionally are exempt if their total from the same taxpayer in the tax period does not exceed CZK 50!000 . Further exemption applies to property invested in a family foundation or trust fund under the conditions defined in the Income Tax Act.
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Example
Mr. Novák was employed in 2024. In addition to income from employment! he had the following income:
He inherited ½ of an apartment worth 2 million CZK from his mother.
A family friend without children of her own left him a legacy of buying a property involves goals in life CZK 100!000 in her will. Mr. Novák is not related to her in any way.
The other half of the apartment! worth 2 million CZK! was donated to him by his father! who inherited it from his wife! Mr. Novák’s mother.
In 2024! Mr. Novák’s house was hit by a flood. In connection with this! he received CZK 100!000 from a public collection to eliminate the consequences of the flood. He also received CZK 50!000 from his employer to help eliminate the consequences of the flood.
A friend of Mr. Novák gave him a car worth CZK 500!000. The friend is not related to Mr. Novák nor does he live in the same household with him.
Does Mr. Novák have to pay taxes on his income?
Income received as an inheritance is exempt from income tax for individuals.
Income from inheritance is exempt even if the survivor was not related to the deceased or did not live in a common household with him.
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Donations from public collections and donations for b2c phone list humanitarian or charitable purposes are exempt from income tax. Mr. Novák does not have to pay tax on a donation from his employer for flood relief either.
Gifts from persons who are not relatives in the direct or collateral line or who do not live with the taxpayer in the same household are exempt up to a limit of CZK Which income is exempt 50!000 per year. Mr. Novák must tax a gift in the form of a car worth CZK 500!000.
Income from the sale of real estate
Income from the sale of a family house or apartment unit is exempt from income tax according to Section 4! paragraph 1! letter a) of the Income Tax Act! if the seller resided in it for at least 2 years immediately before the sale . In this case! the exemption requires that the taxpayer actually resides in the apartment! it is not enough to simply formally register as a permanent resident. This exemption cannot be applied to non-residential units! sometimes referred to as a studio! for example.
If the taxpayer does not meet the residence requirement for 2 years immediately prior to the sale! not even a loved one (e.g. children).
Another option for exempting income from the sale of real estate is to meet the time test ! when the period between the acquisition of the real estate and its sale exceeds 10 years. For real estate acquired before 1