Summary of exemption u/s 10 to salaried employee

@VaibhavJ (Believe!! Live your dreams!)   (33506 Points)

21 December 2012  

Exemption available u/s 10 to salaried employee is summarised below for ready recokner.

Section Income Maximum Exempt Amount Conditions


Gratuity.  Rs. 10,00,000  - Gratuity payable when employee has served minimum service of 4 years & 240 days.
- Amt payable = No. of years completed X Last drawn Basics X 15 /26
10(10AA) Leave encashment  Rs. 3,00,000  - Any amount paid while continuation of the service with the said organisation is fully taxable.
- Amt payable = Leave balance at the time of leaving organisation X avg. basic salary of last 10 months / 30 days
- Maximum leave allowable per year to be considered as 30 days while calculating leave balance on leaving organisation
10(10B)  Retrenchment Compensation Rs. 3,00,000 - Subject to maximum  : An amount calculated as per section 25F (b) of the Industrial Disputes Act, 1947; or actual amount.
- NA when received in accordance of Govt Scheme
10(10C) Compensation for voluntary retirement (V.R.S) Rs. 5,00,000 As per Rule 2BA of the Income Tax Rules.
10(10CC) Tax on non-monetary perquisites paid by the employer Actual amount paid NA
10(11) Payments received from a provident fund Actual amount paid See Section for more details
10(12) Accumulated balance in a recognized provident fund Actual amount paid See Section for more details
10(13A) House rent allowance Least of -
1. HRA actually paid
2. Rent paid Less 10% of Salary.
3. 50% of Salary if residing in Kolkata, Mumbai, Delhi or Chennai and 40% of Salary in other cases.

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