Income shall be chargeable to income-tax under the head salaries as per slab rates prescribed:
Salary = Salary due + paid + allowed
NOTE:
§ Advance salary already taxed shall not be taxed again
§ Any salary, bonus, commission or remuneration due or received by a partner shall not be regarded as ‘salary’
“Salary”, “Perquisite”, “Profit in lieu of salary” defined
[ 1] SALARY includes
Ø Wages
Ø Pension or annuity
Ø Gratuity
Ø Fees, commission, or profit in lieu or in addition of any salary or wages
Ø Advance of salary
Ø Payment received by an employee in respect of any period of leave not availed by him
Ø The annual accretion to the balance at the credit of an employee participating in a recognized PF
Ø Taxable contribution made by central government or any other employer in the previous year
Ø Contribution made by central government in the previous year to the Agniveer corpus fund account of an individual enrolled in Agnipath scheme
[2] PERQUISITE
Ø Value rent -free/other accommodation
Ø Value of any benefit or amenity granted at concessional rate or free of cost by a company or employer to
A. Director
B. Person who has a substantial interest
C. Any other person having salary [exclusive of perquisite] > 50,000
Ø Any sum paid by the employer
Ø Any sum payable by the employer other than a recognized PF or an approved superannuation fund or a deposit- linked insurance fund
Ø Value of any specified security or sweat equity shares allotted at free of cost or at concessional rate
Ø Amount or the aggregate of amounts of any contribution made by the employer –
A. Recognized PF
B. Scheme referred to in sub-section [1] of section 80CCD
C. Approved superannuation fund
To the extent it exceeds Rs.7,50,000 in a previous year
Ø Annual accretion by way of interest, dividend previous year to the balance at the credit of the fund
Ø Value of any other fringe benefit or amenity
Nothing shall apply to expenses paid or reimbursed on account of medical treatment of the employee. (Treatment + Travel+ Stay with 1 attendant)
Deductions from salaries
A. Standard deduction of Rs.75,000
B. Entertainment allowance = 1/5th of salary
C. Tax paid on employment
Exemptions
1. Any payment from the NPS on partial withdrawal up to < 25% of contribution made
2. Any payment from Agnipath Scheme
3. Special allowance as per actual expenditure
4. HRA if live in rented house subject to minimum of
a. Total HRA received from your employer
b. (Rent paid) (-) (10% of basic salary +DA)
c. 40% of salary (Basic salary + DA) for non-metro cities and 50% of salary (Basic salary+DA) for metro cities
where Metro cities are Delhi, Mumbai, Chennai and Kolkata
5. Hilly Areas Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow Bound Area Allowance or Avalanche Allowance as per prescribed limit
6. Tribal Area Allowance = Rs. 200 pm
7. Children Education Allowance = Rs.100 pm for max. 2 children
8. Child Hostel Allowance = = Rs.300 pm for max. 2 children
9. LTA
Others
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