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ListofbenefitsavailabletoSalariedPersons
[AY201718]
S. Section Particulars Benefits
N.
A. Allowances
1. 10(13A) House Rent Allowance (Sec. Leastofthefollowingisexempt:
10(13A)&Rule2A) a)ActualHRAReceived
b) 40% of Salary (50%, if house situated in
Mumbai,Calcutta,DelhiorMadras)
c)Rentpaidminus10%ofsalary
* Salary= Basic + DA (if part of retirement
benefit)+TurnoverbasedCommission
Note:
i. Fully Taxable, if HRA is received by an
employeewhoislivinginhisownhouseor
ifhedoesnotpayanyrent
ii.ItismandatoryforemployeetoreportPAN
ofthelandlordtotheemployerifrentpaid
ismorethanRs.1,00,000[CircularNo.08
/2013dated10thOctober,2013].
2. 10(14) ChildrenEducationAllowance Up to Rs. 100 per month per child up to a
maximumof2childrenisexempt
3. 10(14) HostelExpenditureAllowance Up to Rs. 300 per month per child up to a
maximumof2childrenisexempt
4. 10(14) Transport Allowance granted to an UptoRs.1,600permonth(Rs.3,200permonth
employee to meet expenditure on forblindandhandicappedemployees)isexempt
commuting between place of
residenceandplaceofduty
5. Sec. Transport Allowance to an Amount of exemption shall be lower of
10(14) employee working in any transport following:
business to meet his personal a)70%ofsuchallowanceor
expenditure during his duty b)Rs.10,000permonth.
performed in the course of running
of such transport from one place to
another place provided employee is
notinreceiptofdailyallowance.
6. 10(14) Conveyance Allowance granted to Exempttotheextentofexpenditureincurred
meettheexpenditureonconveyance
inperformanceofdutiesofanoffice
7. 10(14) AnyAllowancegranted to meet the Exempttotheextentofexpenditureincurred
costoftravelontourorontransfer
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b)Expensesonstayabroadforpatientandone
attendant exempt to the extent permitted
byRBI.
c)Costontraveloftheemployeeoranyfamily
or one attendant exempt, if Gross Total
Income (before including the travel
expenditure) of the employee, does not
exceedRs.2,00,000.
C. Deductionfromsalary
1. 16(ii) EntertainmentAllowancereceived Leastofthefollowingisdeductible:
bytheGovernmentemployees a)Rs5,000
(Fullytaxableincaseofother
b) 1/5th of salary (excluding any allowance,
employees)
benefitsorotherperquisite)
c)Actualentertainmentallowancereceived
2. 16(iii) EmploymentTax/ProfessionalTax. Amount actually paid during the year is
deductible. However, if professional tax is paid
bytheemployeronbehalfofitsemployeethanit
isfirstincludedinthesalaryoftheemployeeasa
perquisite and then same amount is allowed as
deduction.
D. RetirementBenefits
a)LeaveEncashment
1. 10(10AA) Encashment of unutilized earned FullyExempt
leave at the time of retirement of
Governmentemployees
2. 10(10AA) Encashment of unutilized earned Leastofthefollowingshallbeexemptfromtax:
leave at the time of retirement of a)Amountactuallyreceived
other employees (not being a
b)Unutilizedearnedleave*XAveragemonthly
Governmentemployee)
salary
c)10monthsAverageSalary**
d)Rs.3,00,000
*While computing unutilized earned leave,
earned leave entitlements cannot exceed 30 days
for each year of service rendered to the current
employer
**Averagesalary=AverageSalary***oflast10
monthsimmediatelyprecedingtheretirement
***Salary=BasicPay+DearnessAllowance(to
the extent it forms part of retirement benefits)+
turnoverbasedcommission
b)RetrenchmentCompensation
1. 10(10B) Retrenchment Compensation Leastofthefollowingshallbeexemptfromtax:
received by a workman under the a)anamountcalculatedaspersection25F(b)of
IndustrialDisputeAct,1947(Subject theIndustrialDisputesAct,1947
tocertainconditions).
b)Rs.5,00,000or
c)Amountactuallyreceived
Note:
i.ReliefunderSection89(1)isavailable
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ii.15daysaveragepayforeachcompletedyear
ofcontinuousserviceoranypartthereofin
excess of 6 months is to be adopted under
section 25F(b) of the Industrial Disputes
Act,1947.
c)Gratuity
1. 10(10)(i) Gratuity received by Government FullyExempt
Employees (Other than employees
ofstatutorycorporations)
2. 10(10)(ii) Death cumRetirement Gratuity Leastoffollowingamountisexemptfromtax:
received by other employees who 1.(*15/26)XLastdrawnsalary**Xcompleted
are covered under Gratuity Act, yearofserviceorpartthereofinexcessof6
1972 (other than Government months.
employee) (Subject to certain
2.Rs.10,00,000
conditions).
3.Gratuityactuallyreceived.
*7 days in case of employee of seasonal
establishment.
** Salary = Last drawn salary including DA but
excluding any bonus, commission, HRA,
overtime and any other allowance, benefits or
perquisite
3. 10(10) Death cumRetirement Gratuity Leastoffollowingamountisexemptfromtax:
(iii) received by other employees who 1. Half months Average Salary* X Completed
are notcoveredunder Gratuity Act, yearsofservice
1972 (other than Government
2.Rs.10,00,000
employee) (Subject to certain
conditions). 3.Gratuityactuallyreceived.
*Average salary = Average Salary of last 10
months immediately preceding the month of
retirement
**Salary=BasicPay+DearnessAllowance(to
the extent it forms part of retirement benefits)+
turnoverbasedcommission
d)Pension
1. Pension received from United FullyExempt
Nation Organization by the
employeeofhisfamilymembers
2. 10(10A) Commuted Pension received by an FullyExempt
(i) employee Central Government,
State Government, Local Authority
Employees and Statutory
Corporation
3. 10(10A) Commuted Pension received by 1/3 of full value of commuted pension will be
(ii) other employees who also receive exemptfromtax
gratuity
4. 10(10A) Commuted Pension received by 1/2 of full value of commuted pension will be
(iii) otheremployeeswhodonotreceive exemptfromtax
anygratuity
5. 10(19) Family Pension received by the FullyExempt
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familymembersofArmedForces
6. 57(iia) Family pension received by family 33.33% of Family Pension subject to maximum
membersinanyothercase ofRs.15,000shallbeexemptfromtax
e)VoluntaryRetirement
1. 10(10C) Amount received on Voluntary Leastofthefollowingisexemptfromtax:
Retirement or Voluntary Separation 1) Actual amount received as per the guidelines
(Subjecttocertainconditions) i.e.leastofthefollowing
a) 3 months salary for each completed year of
services
b) Salary at the time of retirement X No. of
monthsofservicesleftforretirementor
2)Rs.5,00,000
f)ProvidentFund
1. EmployeesProvidentFund For taxability of contribution made to various
employees provident fund and interest arising
thereonseeNote3.
g)NationalPensionSystem(NPS)
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3. SalaryreceivedfromUnitedNation FullyExempt
Organization [Circular No. 293,
dated10021981]
4. 10(6)(ii) Salary received by foreign national Fully Exempt if corresponding official in that
as an officials of an embassy, high foreigncountryenjoysasimilarexemption
commission, legation, consulate or
trade representation of a foreign
state
5. 10(6)(vi) Remuneration received by non Fullyexempt
resident foreign citizen as an
employeeofaforeignenterprisefor
servicesrenderedinIndia,if:
a) Foreign enterprise is not
engaged in any trade or
businessinIndia
b) His stay in India does not
exceed in aggregate a period
of 90 days in such previous
year
c) Suchremuneration is not liable
to deducted from the income
of employer chargeable under
thisAct
6. 10(6) Salary received by a nonresident Fullyexempt
(viii) foreign national for services
rendered in connection with his
employmentonaforeignshipifhis
total stay in India does not exceed
90daysinthepreviousyear.
7. Salaryandallowancesreceivedbya FullyExempt
teacher /professor from SAARC
member state (Subject to certain
conditions).
Notes:
1.MotorCar(taxableonlyincaseofspecifiedemployees[Seenote4])exceptwhencarownedbythe
employee is used by him or members of his household wholly for personal purposes and for which
reimbursementismadebytheemployer)
S. Circumstances EngineCapacityupto1600cc EngineCapacityabove1600
No. (valueofperquisite) cc(valueofperquisite)
1 MotorCarisownedorhiredbytheemployer
1.1 Wheremaintenancesandrunningexpensesincludingremunerationofthechauffeuraremetor
reimbursedbytheemployer.
1.1A If car is used wholly and Fully exempt subject to Fully exempt subject to
exclusively in the maintenance of specified maintenance of specified
performance of official documents documents
duties.
1.1B If carisusedexclusively for Actual amount of expenditure incurred by the employer on the
the personal purposes of the running and maintenance of motor car including remuneration
employee or any member of paid by the employer to the chauffeur and increased by the
hishousehold. amount representing normal wear and tear of the motor car at
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10%p.a.ofthecostofvehiclelessanyamountchargedfromthe
employeeforsuchuseistaxable
1.1C The motor car is used partly Rs. 1,800 per month (plus Rs. Rs. 2,400 per month (plus Rs.
in the performance of duties 900 per month, if chauffeur is 900 per month, if chauffeur is
and partly for personal also provided to run the motor also provided to run the motor
purposes of the employee or car) car)
any member of his
household. Nothing is deductible in respect of any amount recovered from
theemployee.
1.2 Wheremaintenancesandrunningexpensesaremetbytheemployee.
1.2A If car is used wholly and Not a perquisite, hence, not Not a perquisite, hence, not
exclusively in the taxable taxable
performance of official
duties.
1.2B If carisusedexclusively for Expenditureincurredbytheemployer(i.e.hirecharges,ifcaris
the personal purposes of the onrentornormalwearandtearat10%ofactualcostofthecar)
employee or any member of plussalaryofchauffeurifpaidorpayablebytheemployerminus
hishousehold amountrecoveredfromtheemployee.
1.2C The motor car is used partly Rs.600permonth(plusRs.900 Rs.900permonth(plusRs.900
in the performance of duties per month, if chauffeur is also per month, if chauffeur is also
and partly for personal providedtorunthemotorcar) providedtorunthemotorcar)
purposes of the employee or
anymemberofhishousehold Nothing is deductible in respect of any amount recovered from
theemployee.
2 MotorCarisownedbytheemployee
2.1 Wheremaintenancesandrunningexpensesincludingremunerationofthechauffeuraremetor
reimbursedbytheemployer.
2.1A Thereimbursementisforthe Fully exempt subject to Fully exempt subject to
useofthevehiclewhollyand maintenance of specified maintenance of specified
exclusively for official documents documents
purposes
2.1B Thereimbursementisforthe Actual expenditure incurred by the employer minus amount
useofthevehicleexclusively recoveredfromtheemployee
for the personal purposes of
theemployeeoranymember
ofhishousehold
2.1C Thereimbursementisforthe Actual expenditure incurred by Actual expenditure incurred by
use of the vehicle partly for the employer minus Rs. 1800 the employer minus Rs. 2400
official purposes and partly per month and Rs. 900 per per month and Rs. 900 per
for personal purposes of the month if chauffer is also month if chauffer is also
employee or any member of provided minus amount provided minus amount
hishousehold. recoveredfromemployee. recoveredfromemployee.
3 Where the employee owns any other automotive conveyance and actual running and
maintenancechargesaremetorreimbursedbytheemployer
3.1 Reimbursement for the use Fully exempt subject to Fully exempt subject to
of the vehicle wholly and maintenance of specified maintenance of specified
exclusively for official documents documents
purposes
3.2 Reimbursement for the use Actual expenditure incurred by NotApplicable
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2.EducationalFacilities
Taxableonlyinthehandsofspecifiedemployees[Seenote4]
Facility Valueofperquisite
extended
to Providedintheschoolownedbytheemployer Providedinanyotherschool
Children Cost of such education in similar school less Rs. Amount incurred less amount
1,000permonthperchild(irrespectiveofnumbers recovered from employee (an
ofchildren)lessamountrecoveredfromemployee exemption of Rs. 1,000 per month per
childisallowed)
Other Cost of such education in similar school less Costofsucheducationincurred
family amountrecoveredfromemployee
member
2.1OtherEducationalFacilities
Particulars Taxable Value of
Perquisites
Reimbursement of school fees of children or family member of Fullytaxable
employees
Freeeducationalfacilities/trainingofemployees Fullyexempt
3.EmployeesProvidentFund
Tax treatment in respect of contributions made to and payment from various provident funds are
summarizedinthetablegivenbelow:
Particulars Statutory Recognized provident Unrecognized Public
provident fund providentfund provident
fund fund
Employers contribution to Fully Exempt only to the extent FullyExempt
providentfund Exempt of12%ofsalary*
Deduction under section Available Available NotAvailable Available
80C on employees
contribution
Interestcreditedtoprovident Fully Exempt only to the extent FullyExempt Fully
fund Exempt rate of interest does not Exempt
exceed9.5%
Paymentreceivedatthetime Fully Fully Exempt (Subject to Fully Taxable Fully
of retirement or termination Exempt certain conditions and (except employees Exempt
ofservice circumstances) contribution)
*Salary=BasicPay+DearnessAllowance(totheextentitformspartofretirementbenefits)+turnover
basedcommission
Payment from recognized provident fund shall be exempt in the hands of employees in following
circumstances:
a)Ifemployeehasrenderedcontinueservicewithhisemployer(includingpreviousemployer,whenPF
accountistransferredtocurrentemployer)foraperiodof5yearsormore
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b)Ifemployeehasbeenterminatedbecauseofcertainreasonswhicharebeyondhiscontrol(illhealth,
discontinuationofbusinessofemployer,etc.)
4.SpecifiedEmployee
Thefollowingemployeesaredeemedasspecifiedemployees:
1)Adirectoremployee
2) An employee who has substantial interest (i.e. beneficial owner of equity shares carrying 20% or
morevotingpower)intheemployercompany
3)Anemployeewhosemonetaryincome*underthesalaryexceedsRs.50,000
*MonetaryIncomemeansIncomechargeableunderthesalarybutexcludingperquisitevalueofallnon
monetaryperquisites
[AsamendedbyFinanceAct,2016]
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