EXEMPTIONS/DEDUCTIONS FROM SALARY
1. VOLUNTARY RETIREMENT – 10(10C)
Amount received or receivable (ie.,in instalments) by an employee on his voluntary retirement in accordance with any scheme of Voluntary Retirement is exempt to the extent of Rs.5,00,000, provided the VRS is in accordance with Rule 2BA of IT Rules. However no 89(1) relief can be claimed.
2. HOUSE RENT ALLOWANCE EXEMPT U/S.10(13A) – Read with Rule 2A of IT Rules 1962
a) Actual HRA received : Rs.xxxx
b) Rent paid in excess of 10% of Salary : Rs.xxxx
c) 50% of Salary in Metro Cities or
40% of Salary in other cities : Rs.xxxx
Least of a), b), c) is exempt.
NOTE: Here Salary means Basic Salary as well as DA if the terms of employment so provide.
3. CONVEYANCE ALLOWANCE:
Any allowance granted to meet the expenditure incurred wholly, necessarily and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s.10(14).
4. TRANSPORT ALLOWANCE:
Any allowance granted to an employee to meet the expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent upto Rs.800/- per month is exempt u/s.10(14).
5. MEDICAL REIMBURSEMENT:
An amount of Rs.15,000 or the actual amount reimbursed by the employer whichever is less is exempt u/s.17(2).
6. PROFESSION TAX :
Profession Tax levied by the State Government is allowable as a deduction from Gross Salary provided it has been paid.