Exemption

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Exemption is an immunity, exception, or freedom from the liability, duty, or other requirements, such as exemptions from taxation or execution for certain property, or exemptions from military conscription.

In particular, the exemption can refer to a privilege allowing a judgment debtor to retain certain property from being taken in execution, bankruptcy, or other procedures. Also termed debtor's exemption.

In tax law, it refers to the amount allowed as a deduction from gross income for the purpose of determining taxable income

[Last updated in August of 2021 by the Wex Definitions Team]