It seems that exemption and exception have the same meaning. However, they seem to be used differently. When should we use one and not the other?
They do have similar meanings. They both refer to leaving out an item from a set. The difference is how they are left out.
an exemption is left out of the set by an authority or man-made rule. For example, a tax exemption, is money you received but does not have to be counted as part of our income because the tax laws explicitly say it's OK to ignore (presumably with the law created for some economic incentive purpose).
an exception has no such man-made connotations (i.e. an exemption might be considered a kind of exception, but might be totally arbitrary). The number 2 is an exception to the idea that all prime numbers are odd (one would never use exemption in that context).
I found this answer from a forum and I'll simply digest it here and paste the original post.
Exemption is exclusion of something from the normal treatment defined by the rules or policies. Examples:
- It's possible to make your annual bonus to be tax-exempted. You don't say tax-excepted.
- You can be exempted from school requirements due to some disability. You don't say you can be excepted from school requirements.
Exception is used to describe special cases of a rule, instruction, practice, or activity you're describing. Examples:
- It's possible to make your annual bonus to be tax-exempted except when the annual bonus exceeds more than 3 months of your salary.
- A person may be exempted from a school requirement due to some disability except when the school requirement recognizes no disability or if the declared disability has no effect in fulfilling the said requirement.
That is how I think the two words differ from each other according the original post I got from the forum and how I usually encounter those words from articles or literature. Please correct me if I'm wrong.
"Exemption is when you don't have to do something, or when something is not subject to the normal treatment, like you don't have to go to the military service, or part of your revenue is not taxable. Exception is whatever doesn't follow a rule, whatever it is, grammar, relations, financial, mathematics... In that sense, exemptions are exceptions to thinks that have to be done"
— Reluck on Wordreference.com
I'm not sure about what the real answer is since there was no authoritative citation provided.