From Longman Business Dictionarytax-exempt incomeˌtax-exempt ˈincome (also tax-free income) [countable, uncountable]TAX a part of personal income on which you do not have to pay income taxHis tax return shows that he earned $217,000 in taxable and tax-exempt income last year.A unit investment trust generates tax-free income from interest over the life of the trust. → income
