Salaries

Tax queries 449 views 5 replies

Should the following be included while caculating Rent Free Accomodation u/s 17(2)(i)

1. Medical Reimbursement

2 Leave Travel Concession

3 Leave Encashment

Replies (5)

Perquisites under sec 17(2) is excluded for the purpose of this computation  - so exclude Leave travel concession, Medical reimbursement. 

Leave encashment is to be included since it is taxable under sec 17(1)

is ltc is covered u/s 17(2)

Yes it is covered under sec 17(2)(ii) - "Value of any benefit/amenity granted free or at concessional

rate to specified employees etc.".  to specifiied employees

Specified employees are 

Director-employee OR

 

an employee having 20% or more of voting power in the employer- company OR

 

 

 

 

 

 

An employee who is drawing salary in excess of Rs.50,000.00 p.a. and does not fall under the above two categories

Since almost everyone draws salary in excess of Rs 50,000 p.a - everybody is a specified employee

for calculating rent ,the following shall not be taken.

1) DA not forming part of retirement benefit

2) emplyer's contribution to pf

3) allowances which are exempt from tax.

4) perquisites referred under section 17(2)

5)medical reimbursement to the extent exempt i.e. Rs.15000 pa

thus if medical is below 15000 it need not be taken provided it should be paid as reimbursement for expenses.leave travel concession if  forms part of 10(5), then need not be taken.leave allowance availed during service is taxable.hence it is to be taken.

sorry a mistake is committed by me.medical as forms part of perquisite it will not be included in any circumstances.


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