CA's Referencer

S.N.

Particulars

Section

Benefits/Deductions allowed

A.

Presumptive Taxation Scheme

1.

Computation of income from eligible business on presumptive basis under Section 44AD (Subject to certain conditions).

44AD

  •  Presumptive income of eligible business shall be 8 % of gross receipt or total turnover (if turnover or gross receipts of eligible business does not exceed Rs. 2 crore).

  •  Presumptive income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system or through such other electronic mode as may be prescribed.

Note:If the amount of cash received during the previous year does not exceed 5% of the total turnover or gross receipt of such year then the threshold limit for total turnover shall be taken as Rs. 3 crore instead of Rs. 2 crore. The receipts through the mode of cheque or a bank draft which is not an account payee, shall be considered a receipt in cash for this purpose.

2.

Computation of income from profession on presumptive basis under Section 44ADA (Subject to certain conditions).

44ADA

Presumptive income of profession shall be 50% of gross receipt (if gross receipt of assessee does not exceed Rs. 50 lakh).

Note: if the amount of cash received during the previous year does not exceed 5% of the total gross receipt of such year then the threshold limit for total gross receipt shall be taken as Rs. 75,00,000 instead of Rs. 50,00,000. The receipts through the mode of cheque or a bank draft which is not an account payee, shall be considered a receipt in cash for this purpose.

3.

Presumptive income from business of plying, hiring or leasing of goods carriage if assessee does not own more than 10 goods carriage.

44AE

For Heavy Goods Vehicle:

Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by assessee

For Other Goods Vehicle:

Rs. 7,500 for every month or part of a month during which the goods carriage is owned by assessee

Note: 'Heavy goods vehicle' means goods carriage vehicle the gross vehicle weight of which exceeds 12,000 kilograms.

B.

Deductions from business profits

1.

Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises

30

Actual expenditure incurred excluding capital expenditure

2.

Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture

31

Actual expenditure incurred excluding capital expenditure

3.

Depreciation shall be allowed in respect of following assets:

i. Tangible Assets (buildings, machinery, plant or furniture);

ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession).

32(1)(i)

Depreciation shall be allowed, to taxpayers engaged in business of generation or generation and distribution of power, at prescribed percentage on actual cost of an asset

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

Note:

Taxpayers engaged in the business of generation or generation and distribution of power shall have the option to claim depreciation either on basis of straight line basis method or written down value method on each block of asset.

4.

Depreciation shall be allowed in respect of following assets:

i. Tangible Assets (buildings, machinery, plant or furniture);

ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession).

32(1)(ii)

Depreciation shall be allowed to all taxpayer (except as referred to above) at prescribed percentage on written down value of each block of asset (as per WDV method).

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

5.

Additional depreciation shall be allowed to the following assessees in respect of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.]:

a) manufacture or production of any article or thing; or

b) generation, transmission or distribution of power (if taxpayer is not claiming depreciation on basis of straight line method)

32(1)(iia)

Additional depreciation to be allowed at 20 % of actual cost of new plant and machinery.

However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.

6.

Additional depreciation shall be allowed on new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) shall be allowed subject to certain conditions.

Such additional depreciation to be allowed to all taxpayers which set up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal.

Note:

1. Manufacturing unit should be set-up on or after April 1, 2015.

2. New plant and machinery should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

Proviso to Section 32(1)(iia)

Additional depreciation to be allowed at 35 % of actual cost of new plant and machinery.

However, if an asset is acquired and put to use for less than one 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% in next year.

7.

Investment allowance shall be allowed to a company engaged in business or manufacturing or production of any article or thing (Subject to certain conditions).

32AC

Investment allowance shall be allowed at 15% of actual cost of new asset acquired and installed.

8.

Investment allowance shall be allowed to all taxpayers who acquire new plant and machinery for purpose of setting-up manufacturing unit in notified backward areas in the State of Andhra Pradesh, Bihar, Telangana or West Bengal.

Note:

1. New asset should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

2. Manufacturing unit should be set-up on or after April 1, 2015.

3. Deduction shall be allowed under Section 32AD in addition to deduction under Section 32AC if assessee fulfils the specified conditions.

32AD

Investment allowance shall be allowed at 15% of actual cost of investment made in new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.)

9.

Insurance premium covering risk of damage or destruction of stocks/stores

36(1)(i)

Actual expenditure incurred

10.

Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society

36(1)(ia)

Actual expenditure incurred

11.

Medical insurance premium paid by any mode other than cash, to insure employee's health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA

36(1)(ib)

Actual expenditure incurred

12.

Bonus or commission paid to employees which would not have been payable as profit or dividend if it had not been paid as bonus or commission

36(1)(ii)

Actual expenditure incurred

13.

Interest paid in respect of capital borrowed for the purposes of the business or profession.

36(1)(iii)

Actual amount of interest incurred.

Note:

If sum is borrowed for acquiring a capital asset, interest thereon pertaining to the period before asset is first put to use shall not be allowed as deduction.

14.

Employer's contributions to recognized provident fund and approved superannuation fund [subject to certain limits and conditions]

36(1)(iv)

Actual expenditure incurred

15.

Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee's salary in the previous year.

36(1)(iva)

Actual expenditure incurred subject to the limit of 14 per cent of the employee's salary*

*Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

16.

Contributions to approved gratuity fund (Subject to certain limits and conditions)

36(1)(v)

Actual expenditure incurred

17.

36(1)(va)

Actual expenditure incurred not exceeding 8.33% of salary of each employee

18.

Allowance in respect of animals which have died or become permanently useless (Subject to certain conditions)

36(1)(vi)

Actual cost of acquisition of such animals less realization on sale of carcasses of animals

19.

Bad debts which have been written off as irrecoverable in books of accounts. (Subject to certain conditions)

Note:

W.e.f. assessment year 2016-17, bad-debts shall be allowed as deduction even if they are not written-off from books of accounts. Such deduction shall be allowed if amount of debt or part thereof has been taken into account in computing income on the basis of Income Computation and Disclosure Standards notified under section 145(2) without recording the same in the accounts.

36(1)(vii)

Actual bad debts which have been written off from books of accounts

20.

Securities Transaction Tax paid

36(1)(xv)

Actual expenditure incurred if corresponding income is included as income under the head profits and gains of business or profession

21.

Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year is allowed as deduction

36(1)(xvi)

Actual expenditure incurred if corresponding income is included as income under the head profits and gains of business or profession

22.

Amount of expenditure incurred by a co-operative society (engaged in business of manufacture of sugar) for purchase of sugarcane.

36(1)(xvii)

Deduction would be allowed the extent of lower of following:

a) Actual purchase price of sugarcane, or

b) Price of sugarcane fixed or approved by the Government

24.

Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession

37(1)

Actual expenditure incurred

25.

Interest, salary, bonus, commission or

remuneration paid to partners (subject

to certain conditions and limits)

40(b)

a) Interest, in accordance with terms of partnership deed but not exceeding simple interest at 12 per annum

b) Remuneration to working partners:

■ If book profit is negative: Rs. 3,00,000

■ If book profit is positive:

(i) Rs. 3,00,000 or 90% of book profit, whichever is more, on first Rs. 6 lakhs of book profit

(ii)  60% of balance book profit

C.

Maintenance of books of accounts and audit thereof

1.

Compulsory maintenance of prescribed books of account – Specified Profession

(Subject to certain conditions and circumstances)

44AA

Persons carrying on specified profession

2.

Compulsory maintenance of books of account – Other business or profession

(Subject to certain conditions and circumstances)

44AA

 1) If the total sales, turnover or gross receipts exceeds Rs 10,00,000 in any one of the three years immediately preceding the previous year; or

 2) If the income from business or profession exceeds Rs 1,20,000 in any one of the three years immediately preceding the previous year.

Note: Individuals or HUFs shall be required to maintain books of account only when either their gross turnover/gross receipts exceed Rs 2,50,0000 or their income from business or profession exceed Rs 2,50,000.

3.

Compulsory Audit of books of accounts (Subject to certain conditions and circumstances)

44AB

  1) If total sales, turnover or gross receipts exceeds Rs. 1 Crore in any previous year, in case of business; or

  2) If gross receipts exceeds Rs. 50 Lakhs in any previous year, in case of profession.

Note:

  a) This section is not applicable to the person, who opts for presumptive taxation Scheme under Section 44AD/44ADA.

  b) Threshold limit of Rs. 1 crore shall be increased to Rs. 10 crore in case where the cash receipt and payment made during the year does not exceed 5% of total receipt or payment the business

D.

Exemptions and Deductions

1.

Amount received by individual member from HUF. [Subject to the provisions of Section 64(2)]

10(2)

Entire amount is exempt from tax

2.

Share of profit received by partners from a partnership firm.

10(2A)

Entire amount is exempt from tax

3.

Any sum of money or immovable property or movable property received on or after April 1, 2017 without consideration or for inadequate consideration*** from a relative or member of HUF (subject to certain conditions and circumstances).

Note:

Any sum of money or immovable property or movable property received on or after April 1, 2017 without consideration or for inadequate consideration*** from a relative or member of HUF (subject to certain conditions and circumstances).

Note:

1. In case of immovable property, 'inadequate consideration' shall mean difference between stamp duty value and actual consideration, if it exceeds Rs. 50,000 or amount equal to 10% of consideration, whichever is higher.

2. Any sum of money received by an individual, from any person, in respect of any expenditure actually incurred by him on his medical treatment or treatment of any member of his family in respect of any illness related to COVID-19, shall not be considered as income of such person. (subject to certain conditions)

3. Any sum of money received by family member of a person who died due to COVID-19, the money so received shall not be considered as income of the family member where such money is received from the employer of deceased person. Where the money is received from any other person or persons, the exemption amount shall be limited to Rs. 10 lakh in aggregate. (subject to certain conditions)

56(2)(x)

The whole amount received from specified relatives or in specified circumstances shall not be included in taxable income.

4.

Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)

80GG

Least of the following shall be exempt from tax:

a) Rent paid in excess of 10% of total income*;

b) 25% of the Total Income; or

c) Rs. 5,000 per month.

Total Income = Gross total income minus long term capital gains, short term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A

5.

Deduction in respect of employment of new employees.

80JJAA

Deduction shall be allowed at 30% of additional employee cost paid for first three Assessment years.

Note:

"Additional employee cost" means total emoluments paid or payable to additional employees employed during the previous year.

Provided that in case of existing business, the additional employee cost shall be nil if –

(a) There is no increase in the number of employees from the total number of employees employed as on the last day of the preceding year ;

(b) Emoluments are paid otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through bank account or through such electronic mode as may be prescribed.

(Subject to other conditions)

Deduction in respect of eligible start-up (subject to certain conditions)

Note:

1.  Eligible start-up means a company or a limited liability partnership, incorporated on or after 1/4/2016 but before 1/4/2030, whose total turnover doesn't exceed Rs. 100 crores in the previous year in which deduction is claimed by that start-up and it holds a certificate from Inter-Ministerial Board of Certification.

2.  The deduction is available for any 3 consecutive assessment years out of 10 years beginning from the year in which the eligible start-up is incorporated.

E.

Tax Deducted at Source and Advance Tax

1.

Lower rate of TDS under Section 194C in case of payments to a contractor or sub-contractor (Subject to certain conditions)

Tax is required to be deducted only if sum paid exceeds Rs. 30,000 or aggregate of sum paid during the financial year exceeds 75,000 (Rs. 100,000 from 01.06.2016).

194C

Deduction of tax at source at 1% if recipient is an Individual or HUF

3.

No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque to an individual and HUF.

193

No TDS if interest during the financial year does not exceed Rs. 5,000

193

3C.

No TDS from dividend paid by any mode other than cash to resident persons.

194

No TDS if amount paid or payable during the financial year does not exceed Rs. 10,000.

4.

No obligation to deduct tax at source under Section 194A, 194C, 194H, 194-I and 194J if an Individual or HUF carries on a business or profession and total sales, turnover or gross receipts from such business or profession does not exceed, Rs. 1 crore in case of business and Rs. 50 lakhs in case of profession, during the financial year immediately preceding the financial year in which sum is to be credited or paid.

-

Not liable to deduct tax at source

4A.

No TDS from payment to participants of e-commerce

194-O

If amount paid or payable to resident Individual or HUF during the financial year does not exceed Rs. 5 Lakhs

4B.

No obligation to deduct tax by an Individual* or HUF* responsible for paying any sum to any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract, by way of commission (not being insurance commission referred to in section 194D) or brokerage or by way of fees for professional services.

* Other than those who are required to deduct income-tax as per the provisions of section 194C, section 194H, or section 194J

194M

No tax shall be deducted from specified payments if the aggregate of sum paid or credited during the year doesn’t exceed Rs. 50 lakhs

4C.

No obligation to file return of income by a senior citizen (whose age is 75 years or more) if:

 a) His total income consists only income in the nature of pension and interest received or receivable from any account maintained with deductor (such bank); and

 a)  Tax on such income is deducted by deductor on the basis of rates in force.

194P

No obligation to file return of income

4D.

No TDS if amount paid or payable to resident seller for purchase of goods during the Financial Year if aggregate value of goods doesn’t exceed Rs. 50 lakhs

194Q

No TDS from payment made to resident seller

4E.

No TDS if aggregate value of benefit/perquisite provided during the Financial Year doesn’t exceed Rs. 20,000

194R

No TDS in case any benefit or perquisite is provided to a resident

4F.

No tax shall be deducted under this provision in the following circumstance:

• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.

• If the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year

Specified person means:

(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;

(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession

194S

No TDS from payment on transfer of Virtual Digital Asset

5.

No deduction of tax shall be made under Sections 194 and 194EE, if resident individual furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

197A(1)

No tax shall be deducted from specified payments if the sum paid does not exceed the maximum amount which is not chargeable to tax

6.

No deduction of tax shall be made under sections 192A, 193, 194, 194A, 194D, 194DA, 194EE, 194-I and 194K if resident senior citizen furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

197A(1C)

No tax shall be deducted from specified payments

7.

Exemption from payment of advance tax by a resident senior citizen or resident super senior citizen not having any income from business or profession

(who is at least 60 Years of age at any time during the previous year)

207(2)

Not liable to pay advance tax

8.

No need to pay advance tax in installments by assessee who has opted for presumptive taxation scheme under Section 44AD or 44ADA

44AD/44ADA

Whole amount of advance tax can be paid in one installment on or before 15^th March of the financial year

9.

Liability for payment of advance tax

208

Taxpayer is liable to advance tax only if his advance tax liability is Rs. 10,000 or more

F.

Basic exemption limits

1.

Maximum amount of income which is not chargeable to Income-tax

Rs. 2,50,000

Individual/HUF taxpayer

2.

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident senior citizen

(who is at least 60 Years of age at any time during the previous year but less than 80 Years of age on the last day of the previous year)

Rs. 3,00,000

Resident Senior Citizen

3.

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident super senior citizen

(who is at least 80 Years of age at any time during the previous year)

Rs. 5,00,000

Resident Super Senior Citizen

4.

Rebate to resident individual whose total income does not exceed Rs. 5,00,000 [Section 87A]

Tax payable subject to maximum of rebate Rs. 12,500

Resident Individual

5.

HUF is assessed to tax as a separate entity

HUF is treated as a person distinct from Individual members or Karta.

HUF

6.

Concessional tax regime under section 115BAC

Option for payment of taxes at reduced rates

(subject to certain conditions)

Individual, HUF/AOP/ BOI/Artificial Juridical Person

Concessional rate of tax for domestic company if –

 (i)  Such company has been set-up and registered on or after March 1, 2016; and

(ii)  It is engaged in business of manufacturing or production of any article or thing

(Subject to certain other conditions)

Concessional rate of tax for domestic manufacturing company if:

a) Such Co. incorporated on or after 01-10-2019;

b) It should commence the manufacturing or production of an article or thing on or after 01-10-2019 but before 31-03-2024;

c) It must be engaged in the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it; or generation of electricity;

d) The total income of the company is computed without providing for specified deductions or exemptions

(Subject to certain other conditions)

S.No.

Section

Particulars

Limit of exemption

Available to

A.

Business or Profession

1.

35D

Amortization of certain preliminary expenses (Subject to maximum of 5% of cost of the project or capital employed, whichever is more) Incurred before commencement of business or after commencement of business in connection with extension of an undertaking (Subject to certain conditions and nature of expenditures)

Qualifying preliminary expenditure is allowable in each of 5 successive years beginning with the previous year in which the extension of undertaking is completed or the new unit commences production or operation.

Indian Company

2.

35D

Amortization of certain preliminary expenses (Subject to maximum of 5% of cost of the project) Incurred before commencement of business or after commencement of business in connection with extension of an undertaking (Subject to certain conditions and nature of expenditures)

Qualifying preliminary expenditure is allowable in each of 5 successive years beginning with the previous year in which the extension of undertaking is completed or the new unit commences production or operation.

Resident Non-corporate assessees

3.

35DD

Amortization of expenditure incurred in connection with amalgamation or demerger on or after 01.04.1999

(Subject to certain conditions)

Allowed as deduction in 5 successive years in equal installments, beginning with the previous year in which such amalgamation or demerger takes place.

Indian Company

4.

35E

Deduction for qualifying expenditure incurred wholly and exclusively on prospecting, for certain minerals or development of a mine, etc. (Subject to certain conditions)

Qualifying expenditure is allowed as deduction in equal installments over a period of 10 years.

Indian Company and Resident Non-Corporate Assessees engaged in prospecting for minerals, etc.

5.

44AD

Computation of income from eligible business on presumptive basis under Section 44AD (Subject to certain conditions).

  •  Presumptive income of eligible business shall be 8 % of gross receipt or total turnover (if turnover or gross receipt of eligible business does not exceed Rs. 2 crore).

  •  Presumptive income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system or through such electronic mode as may he prescribed.

Note: If the amount of cash received during the previous year does not exceed 5% of the total turnover or gross receipt of such year then the threshold limit for total turnover or gross receipt shall be taken as Rs. 3,00,00,000 instead of Rs. 2,00,00,000.

Resident Individual, Resident HUF or Resident Partnership Firm (Other than LLP)

Computation of income from profession on presumptive basis under section 44ADA (Subject to certain conditions).

Concessional rate of tax for domestic company if –

 (i) Such company has been set-up and registered on or after March 1, 2016; and

(ii) It is engaged in business of manufacturing or production of any article or thing

(Subject to certain other conditions)

Concessional rate of tax for domestic company if total income of the company is computed without providing for specified deductions or exemptions

Concessional rate of tax for domestic manufacturing company if:

a) Such Co. incorporated on or after 01-10-2019;

b) It should commence the manufacturing or production of an article or thing on or after 01-10-2019 but before 31-03-2024;

c) It must be engaged in the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it; or generation of electricity;

d) The total income of the company is computed without providing for specified deductions or exemptions

(Subject to certain other conditions)

Concessional rate of tax for resident co-operative society if total income of the co-operative society is computed without providing for specified deductions or exemptions

B.

Capital Gain

1.

47(iv)

Transfer of capital asset by a parent company to its wholly owned Indian subsidiary company shall not be treated as ‘transfer’.

No capital gains shall arise in the hands of holding company due to transfer of capital assets.

Transferee should be an Indian Company

2.

47(v)

Transfer of capital asset by a wholly owned subsidiary company to its Indian holding company shall not be treated as ‘transfer’ (Subject to certain conditions).

No capital gains shall arise in the hands of subsidiary company due to transfer of capital assets.

Transferee should be an Indian Company

3.

47(vi)

Transfer of capital asset in a scheme of amalgamation by amalgamating company to Indian amalgamated company shall not be treated as ‘transfer’.

No capital gains shall arise in the hands of amalgamating company due to transfer of capital assets.

Transferee should be an Indian Company

4.

47(vib)

Transfer of capital asset in a scheme of merger by demerged company to Indian resulting company shall not be treated as ‘transfer’ (Subject to certain conditions).

No capital gains shall arise in the hands of demerged company due to transfer of capital assets.

Transferee should be an Indian Company

5.

47(vii)

Allotment of shares of Indian amalgamated company to the shareholders in the amalgamating company in lieu of their amalgamation shall not be treated as ‘transfer’ (Subject to certain conditions).

No capital gains shall arise in the hands of shareholders in the amalgamating company due to such amalgamation.

Amalgamated company should be an Indian Company

7.

111A

Adjustment of unutilized portion of maximum exemption limit from short-term capital arising from transfer of equity shares or units of equity oriented funds or unit of a business trust and tax on balance short-term capital gains at 20%:

If total income as reduced by such short-term capital gains is below maximum exemption limit (short-fall), such short-term capital gains shall be reduced by such short-fall and tax on the balance of such capital gains shall be computed at: 20%:

Resident Individual and HUF

8.

112

Adjustment of unutilized portion of maximum exemption limit from long-term capital gain and tax on balance long-term capital gains at 12.5% :

If total income as reduced by such long-term capital gains is below maximum exemption limit (short-fall), such long-term capital gains shall be reduced by such short-fall and tax on balance of such capital gains shall be computed at 12.5% :

Resident Individual and HUF

8A.

112A

Adjustment of unutilized portion of maximum exemption limit from long-term capital gain covered under section 112A and tax on balance long-term capital gains at 12.5% :-

If total income as reduced by such long-term capital gains is below maximum exemption limit (short-fall), such long-term capital gains shall be reduced by such short-fall and tax on balance of such capital gains shall be computed at 12.5% :-

Resident Individual and HUF

9.

115ACA

Concessional rate of tax on long-term capital gains arising from transfer of GDRs issued by a listed Indian company, engaged in specified knowledge based industry or service, to its employees in accordance with notified ESOP Scheme. Provided such GDRs are purchased in foreign currency (Subject to certain conditions)

Such long-term capital gains shall be taxable at 12.5%* without allowing benefits of first and second proviso to Section 48

Resident Individual - Employee

C.

Other Sources

1.

115ACA

Concessional rate of tax on dividends on GDRs issued by a listed Indian company, engaged in specified knowledge based industry or service, to its employees in accordance with notified ESOP Scheme. Provided such GDRs are purchased in foreign currency (Subject to certain conditions)

Such dividend shall be taxable at 10%

Resident Individual - Employee

D.

Deductions

1.

80C

Only resident individuals can Investment in Public provident Fund scheme, 1968 either in his own name or in the name of minor of whom he is a guardian.

Maximum deposit in PPF Rs. 1,50,000

Resident Individual

2.

80C

Investment in Senior Citizens Savings Scheme 2004 for 5 year

Max. deduction Rs. 1,50,000

Resident individual who is 60 years of age or by a resident individual who is 55-60 years of age and retired under VRS

3.

80D

Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person*.An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up.

* specified person means:

  -   In case of Individual - self, spouse, dependent children or parents

  -   In case of HUF - Any member thereof

Note:

 1.  Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

 2.  Payment on account of preventive health check-up may be made in cash.

 3.  Within overall limit, deduction shall be allowed up to Rs. 50,000 towards medical expenditure incurred on the health of specified person provided such person is a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

 4.  'Senior citizen' means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

In case of Individual, amount paid:

 a)  For self, spouse and dependent children: Up to Rs. 50,000 if specified person is a senior citizen

 b)  For parents: additional deduction of Rs. 50,000 shall be allowed if parent is a senior citizen

In case of HUF, up to Rs. 50,000 if specified person is a senior citizen

Resident Individual who is senior citizen

4.

80DD

Deduction allowed to resident Individual and HUF for:

a) Any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability

b) Any amount paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability

(Subject to certain conditions).

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Resident Individual and HUF

5.

80DDB

Expenses actually paid by resident individual and HUF for medical treatment of specified diseases and ailments of:

a) In case of Individual: Assessee himself or wholly dependent spouse, children, parents, brothers and sisters

b) In case of HUF: Any member of the family who is wholly dependent upon the family

(Subject to certain conditions).

Up to Rs. 40,000 (Rs. 1,00,000 in case of senior citizen)

Resident Individual/ HUF

6.

80GGB

Sum contributed to political party or electoral trust is allowed as deduction (Subject to certain conditions)

100% of amount contributed (excluding contribution in cash) is allowed as deduction

Indian company

7.

80JJAA

Deduction of additional employee cost in respect of employment of new employees.

Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year.

(Subject to certain other condition)

Deduction of 30% of additional employee cost.

Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.

9.

80QQB

Royalty income of resident individual - authors of certain specified category of books other than text books

Least of the following shall be exempt from tax:

a) In case of Lump sum payment - Amount of royalty income subject to maximum of Rs. 3,00,000

b) In other cases - amount of such income subject to maximum of 15% of value of books sold during the previous year.

Resident Individual Author

10.

80RRB

Royalty in respect of patents registered on or after 01.04.2003 (Subject to certain conditions)

100% of royalty subject to maximum of Rs. 3,00,000

Resident Individual

11.

80U

A resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995]

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Resident Individual

12.

80-IA

Indian Company developing, maintaining and operating any infrastructure facility shall be entitled to claim deduction (Subject to certain conditions).

100% of profit for 10 consecutive AY falling within a period of 15 AY beginning with the AY in which assessee begins operating and maintaining infrastructure facility.

No deduction shall be allowed to any enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.

Indian Company

13.

80-IA

Indian Company formed before 30-11-2005 with majority equity participation by public sector companies to reconstruct or revive a power generating plant shall be entitled to claim deduction. Provided it begins to generate or transmit or distribute power before 31-03-2011 (Subject to certain conditions).

100% of profit for 10 consecutive AY falling within a period of 15 AY beginning with the AY in which assessee begins operating and maintaining infrastructure facility.

Indian Company

E.

TDS

1.

193

No TDS from interest on securities

2.

193

No TDS from interest on 8% Saving (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security paid to a resident persons

If amount paid or payable during the financial year does not exceed Rs. 10,000

Resident persons

3.

193

No TDS from interest on 6.5% Gold Bonds, 1977, or 7% Gold Bonds, 1980

If a declaration is made that the nominal value of such bonds did not exceed Rs. 10,000 at any time during the previous year

Resident Individual

No TDS from payment of interest on following securities:

(a)  National Development Bonds;

(b)  7 Year National Savings Certifications (IV Issue);

(c)  Debentures issued by notified persons;

(d)  Any security of Central or State Government;

(e)  Any listed security issued by a company and held in DEMAT form;

(f)  Securities beneficially owned by LIC, GIC, specified companies or any other insurer.

4.

194

No TDS from dividend paid by any mode other than cash to resident persons.

If amount paid or payable during the financial year does not exceed Rs. 10,000.

Resident person

5.

194A

No TDS from interest (other than on interest on securities) paid by a banking company, post office or co-operative bank on time deposits

Note:

With effect from 01.06.2015, tax shall be deducted from interest credited or paid by a co-operative bank to its member. However, interest paid or credited by a co-operative society to its member or to any other co-operative society shall not be subject to TDS.

If amount paid or payable during the financial year does not exceed Rs. 50,000

Note:

 a)  In case of senior citizens, tax shall not be deducted if interest payment doesn’t exceeds Rs. 1,00,000

 b) With effect from 01.06.2015, time deposit shall also include recurring deposit. Therefore, tax shall be deducted from payment of interest on recurring deposit if it exceeds the threshold limit of Rs. 50,000.

 c) The threshold limit of Rs. 50,000 shall be computed with reference to the income credited or paid by a banking company or co-operative society (and not by individual branch thereof) which has adopted core banking solutions ('CBS').

Resident persons

6.

194A

No TDS from interest on deposit with a post office under Senior Citizens Saving Scheme Rules, 2004

If amount paid or payable during the financial year does not exceed Rs. 1,00,000

Resident persons

7.

194A

No TDS from interest other than on securities (in any other case)

If amount paid or payable during the financial year does not exceed Rs. 1,00,000

Resident persons

8.

194A

No TDS from interest on compensation awarded by Motor Accident Claims Tribunal

If amount paid during the financial year does not exceed Rs. 50,000

Note:

With effect from 01.06.2015, no tax shall be deducted at the time of credit of interest on compensation awarded by the Motor Accidents Claims Tribunal.

Resident persons

9.

194A

No TDS from interest on zero coupon bonds issued by Infrastructure Capital Co., Infrastructure Capital Fund, Public Sector Co. or Scheduled bank

If Zero Coupon Bonds are issued on or after 01-06-2005 by specified entities

Resident persons

10.

194A

No TDS on Interest paid under any provision of Income-tax Act, 1961 or Wealth-tax Act, 1957

Entire interest is paid under the prescribed Acts

Resident persons

11.

194A

No TDS on Interest paid in respect of deposits under any notified scheme or Post Office deposits, Kisan Vikas Patra, NSC VIII Issue, Indira Vikas Patra, etc.

If interest is earned on the prescribed deposits

Resident persons

12.

194C

No TDS from sum paid or payable to contractor (Subject to certain conditions)

a) If sum paid or payable to a contractor in a single payment does not exceed Rs. 30,000

b) If sum paid or payable to contractor in aggregate does not exceed Rs. 1,00,000 during the financial year

Resident Contractor

13.

194C

No TDS from sum paid or payable to transport operator who is in the business of plying, hiring or leasing goods carriage

If transporter owns 10 or less goods carriages at any time during the financial year and he furnishes a declaration with his PAN to person responsible for making payment.

Resident transport operator

14.

194C

No TDS from payment made by an Individual or HUF to a resident contractor for exclusively personal purposes

If payment is made for personal purpose of Individual or HUF

Resident Contractor

15.

194K

No TDS from payment made:

a) in respect of units of a Mutual Fund specified under section 10(23D);

b) units from the administrator of the specified undertaking; or

c) units from the specified company

If amount paid or payable during the financial year does not exceed Rs. 10,000

Resident persons

16.

197A(1)

No deduction of tax shall be made under Sections 194 and 194EE, if resident individual furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

No tax shall be deducted from specified payments if the sum paid does not exceed the maximum amount which is not chargeable to tax

Resident Individual

17.

197A(1C)

No deduction of tax shall be made under Section 192A, Sections 193, 194, 194A, 194D, 194DA, 194-I, 194EE and 194K if resident senior citizen furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

No tax shall be deducted from specified payments

Resident Individual - Senior Citizen and Super Senior Citizen

18.

194LA

No TDS from payment of compensation on compulsory acquisition of immovable property (other than Agricultural Land)

If amount paid or payable during the financial year does not exceed Rs. 5 Lakhs

Resident persons

19.

194D

No TDS from insurance commission paid or payable during the financial year

If amount paid or payable during the financial year does not exceed Rs. 20,000

Resident persons

Resident persons

21.

194H

No TDS from payment of commission or brokerage

If amount paid or payable during the financial year does not exceed Rs. 20,000. Further no tax to be deducted from commission payable by BSNL/MTNL to their PCO Franchisees.

Resident persons

22.

194J

No TDS from payment of professional fees technical fees and royalty

If amount paid or payable during the financial year does not exceed Rs. 50,000

Resident persons

23.

194-I

No TDS from payment of rent in respect of land &building, furniture or fittings or plant and machinery

If amount paid or payable during the financial year does not exceed Rs. 50,000 per month or part of the month.

With effect from 01.06.2015, no tax shall be deducted where income by way of rent is credited or paid to a real estate investment trust in respect of any real estate asset [as referred to in section 10(23FCA)] owned directly by such trust.

Resident persons

24.

194-IA

No TDS from payment of consideration for purchase of an immovable property (other than agriculture land)

If consideration of immovable property and its stamp duty value doesn’t exceed Rs. 50,00,000

Resident Transferor

No TDS from payment of rent in respect of any land or building.

Note:

Other than the rent covered by section 194-I

No TDS from payment to participants of e-commerce

No TDS from payment made to resident seller

No TDS in case any benefit or perquisite is provided to a resident

No TDS from payment on transfer of Virtual Digital Asset

No tax shall be deducted under this provision in the following circumstance:

• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.

• If the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year. Specified person means:

(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;

(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession.

F.

Advance Tax

1.

207(2)

Exemption from payment of advance tax by a resident senior citizen or resident super senior citizen not having any income from business or profession

(who is at least 60 Years of age at any time during the previous year)

Not liable to pay advance tax

Resident Senior Citizen and Resident Super Senior Citizen

G.

Exemptions

1.

-

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident senior citizen

(who is at least 60 Years of age at any time during the previous year but less than 80 Years of age on the last day of the previous year)

Rs. 3,00,000

Resident Senior Citizen

2.

-

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident super senior citizen

(who is at least 80 Years of age at any time during the previous year)

Rs. 5,00,000

Resident Super Senior Citizen

3.

87A

Rebate to resident individual whose total income does not exceed Rs. 5,00,000

Rebate shall be limited to tax payable or Rs. 12,500, whichever is less

Resident Individual

H.

Tonnage Taxation

1.

115V to 115VZC

(Tonnage Taxation)

Qualifying Company may opt for computation of income from business of operating qualifying ship or inland vessel on presumptive basis.

* A company is a ‘Qualifying Company’ if:

a) It is an Indian Company;

b) The place of effective management of it is in India;

c) It owns at least one qualifying ship; and

d) The main object of it is to carry on business of operating ships.

The income from operating ships shall be computed on basis of tonnage of each qualifying ship.

Indian Company

I.

Exemption from return filing

1.

194P

A senior citizen is not liable to furnish the return of income for the previous year in which tax has been deducted under section 194P

No requirement to file return of income by senior citizen if:

 a) His total income consists only income in the nature of pension and interest received or receivable from any account maintained with deductor (such bank); and

 b) Tax on such income is deducted by deductor on the basis of rates in force.

Resident Senior citizens (whose age is 75 years or more)

S.N.

Particulars

Benefits

Available to

1.

Maximum amount of income which is not chargeable to Income-tax

Rs. 2,50,000

Individual/HUF

2.

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident senior citizen,

who is at least 60 Years of age at any time during the previous year but less than 80 Years of age on the last day of the previous year

Rs. 3,00,000

Resident Senior Citizen

3.

Maximum amount of income which is not chargeable to Income-tax in the hands of a resident super senior citizen

who is at least 80 Years of age at any time during the previous year

Rs. 5,00,000

Resident Super Senior Citizen

4.

Rebate to resident individual whose total income does not exceed Rs. 5,00,000 [Section 87A]

Tax payable but subject to maximum of Rs. 12,500

Resident Individual

6.

HUF is assessed to tax as a separate entity

HUF is treated as a person distinct from Individual members or Karta.

HUF

7.

Concessional tax regime under section 115BAC

Option for payment of taxes at reduced rates

(subject to certain conditions)

Individuals and HUF

S.N.

Section

Particulars

Limit of exemption

Available to

1.

10(2)

Amount received by individual member from HUF. [Subject to the provisions of Section 64(2)]

Entire amount

Individual, being a member of an HUF

2.

10(2A)

Share of profit received by partners from a partnership firm.

Entire amount

Partners in a partnership firm

3.

10(4)(ii)

Interest on money standing to the credit in a Non-resident (External) account in India.

Entire amount

Person resident outside India (under FEMA Act) and person who has been permitted to maintain said account by RBI

4.

10(4B)

Interest on notified savings certificates issued before 01-06-2002 by the Central Government and subscribed to in convertible foreign exchange.

Entire Amount

Individual, being a citizen of India or a person of Indian Origin, who is a non resident.

5.

10(5)

Leave travel concession or assistance received by an employee (Subject to certain conditions and limited to amount actually spent)

Notes:

  •  The amount should be received by employee from his employer or former employer for leave to any place in India during term of service or after retirement/termination;

 •  Exemption shall be available for amount incurred in respect of fare for going anywhere in India by employee along with his family. The family means — her/his spouse and children, parents, brothers and sisters only when they are wholly or mainly dependent on the assessee.

  •  The exemption can be availed for two journeys in a block of 4 calendar years.

 •  Exemption shall be available for journey performed by a shortest route and by prescribed mode of transportations in prescribed situations.

Limited to amount actually spent and subject to maximum limits as specified

Individual - Salaried Employee

6.

10(6)(ii)

Remuneration received by Foreign Diplomats/Consulate and their staff (Subject to conditions)

Entire Amount

Individual (not being a citizen of India)

7.

10(6)(vi)

Remuneration received by non-Indian citizen as employee of a foreign enterprise for services rendered in India, if:

a) Foreign enterprise is not engaged in any trade or business in India

b) His stay in India does not exceed in aggregate a period of 90 days in such previous year

c) Such remuneration is not liable to deducted from the income of employer chargeable under this Act

Entire Amount

Individual - Salaried Employee (not being a citizen of India)

8.

10(6)(viii)

Salary received by a non-resident, for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year.

Entire Amount

Non-resident Individual - Salaried Employee (not being a citizen of India)

9.

10(6)(xi)

Remuneration received by an Individual, who is not a citizen of India, as an employee of the Government of a foreign state during his stay in India in connection with his training in any Government Office/Statutory Undertaking, etc.

Entire Amount

Individual - Salaried Employee (not being a citizen of India)

10.

10(7)

Foreign allowances or perquisites paid or allowed by Government to its employees posted outside India

Entire Amount

Individual- Salaried Employee (being a citizen of India)

11.

10(8)

Foreign income and remuneration received from Foreign Government in connection with any co-operative technical assistance programme and projects in accordance with agreement entered into by Central Government and Foreign Government (Subject to certain conditions).

Note: Provisions of this section are applicable w.e.f. Assessment Year 2023-24

Entire Amount

Individual

12.

10(8A)

Foreign income and remuneration received by consultant (agreement relating to his engagement must be approved) out of funds made available to an international organization (agency) under a technical assistance grant agreement between that agency and the Government of a foreign State (Subject to certain conditions).

Note: Provisions of this section are applicable w.e.f. Assessment Year 2023-24

Entire Amount

Individual, being a:

a) A non-resident engaged by the agency for rendering technical services in India;

b) Non-Indian citizen; or

c) Indian citizen who is not ordinarily resident in India

13.

10(8B)

Foreign income and remuneration received by an employee off the consultant as referred to in Section 10(8A) (contract of service must be approved by the prescribed authority before commencement of service).

Note: Provisions of this section are applicable w.e.f. Assessment Year 2023-24

Entire Amount

Individual, being a:

a)  Non-Indian citizen; or

b) Indian citizen who is not ordinarily resident in India

14.

10(9)

Income of any member of family of any individual [referred to in section 10(8), 10(8A) or 10(8B)] which accrues or arises outside India and is not deemed to accrue or arise in India and which is subject to tax in that foreign country

Note: Provisions of this section are applicable w.e.f. Assessment Year 2023-24

Entire Amount

Individual

15.

10(10)

Death-cum-Retirement Gratuity received by:

(i) Government employees

Entire Amount

Individual - Salaried Employee

(ii) Other employees who are covered under Gratuity Act, 1972

Least of following amount is exempt from tax:

1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

2. Rs. 20,00,000#

3. Gratuity actually received.

*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

(iii) Other employees who are not covered under Gratuity Act, 1972

Least of following amount is exempt from tax:

1. 1/2 X Average Salary* X Completed years of service

2. Rs. 20,00,000

3. Gratuity actually received.

*Average salary = Average Salary of last 10 months immediately preceding the month of retirement

**Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

16.

10(10A)

Commuted value of pension received by:

a) Government employee

Entire Amount

Individual - Salaried Employee

b) Other employees

1. 1/3^rd of full value of commuted pension, if gratuity is received by the employee

2. 1/2 of full value of commuted pension, if gratuity is not received by the employee

18.

10(10AA)

Encashment of unutilized earned leave at the time of retirement by:

a) Government employee;

Entire Amount

Individual - Salaried Employee

b) Other employees

Least of the following shall be exempt from tax:

a) Amount actually received

b) Unutilized earned leave* X Average monthly salary

c) 10 months Average Salary**

d) Rs. 25,00,000

*While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each year of service rendered to the current employer

**Average salary = Average Salary*** of last 10 months immediately preceding the retirement

***Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

19.

10(10B)

Retrenchment Compensation received by a workman under the Industrial Dispute Act, 1947. (Subject to certain conditions)

Least of the following shall be exempt from tax:

a) An amount calculated as per section 25F(b) of the Industrial Disputes Act, 1947;

b) Rs. 5,00,000; or

c) Amount actually received.

Individual - Salaried Workmen

20.

10(10BC)

Compensation received for any disaster from Government/ Local Authority (Subject to certain conditions)

Entire amount except for the amount allowed as deduction under this Act on account of loss caused by such disaster.

Individual or his Legal heir

21.

10(10C)

Amount received on Voluntary Retirement or Voluntary Separation (Subject to certain conditions).

Least of the following is exempt from tax:

1) Actual amount received as per the guidelines i.e. least of the following

a) 3 months salary for each completed year of services

b) Salary at the time of retirement X No. of months of services left for retirement; or

2) Rs. 5,00,000

Individual - Salaried Employee

22.

10(10CC)

Tax paid by the employer on perquisites (not provided for by way of monetary payments) given to employee

Entire Amount

Individual - Salaried Employee

23.

10(10D)

Any sum received under a Life Insurance Policy including bonus (excluding Keyman Insurance Policy) (Subject to certain conditions)

Entire Amount

Any Assessee

24.

10(11)

Payment from Public Provident Fund or Statutory Provident Fund

Exempt Subject to certain conditions

Individual and HUF

25.

10(12)

Accumulated balance payable to employee participating in recognized PF (subject to certain conditions).

To the extent provided in Rule 8 of Part A of the Fourth Schedule of the Income-Tax Act.

Individual - Salaried Employee

26.

10(13)

Payment from Approved Superannuation Fund on death or retirement of employee, etc. (Subject to certain conditions)

W.e.f assessment year 2017-18, any amount transferred from superannuation fund to the notified pension scheme referred to in Section 80CCD shall also be exempt from tax.

Exempt subject to certain limits

Individual - Salaried Employee

27.

10(13A)

House Rent Allowance

Least of the following is exempt from tax:

(i) 50% of salary* for metro cities** and 40% of salary for other cities

(ii) Actual HRA received

(iii) Excess of rent paid over 10% of salary*

* Salary = Aggregate of basic salary, DA (to the extent it forms part of retirement benefits) and turnover based commission

** Delhi, Mumbai, Kolkata, Chennai

Individual - Salaried Employee

28.

10(14)

Prescribed allowances for performance of official duties.

To the extent allowance actually incurred for the performance of official duties.

Individual - Salaried Employee

29.

10(15)(iib)

Interest on Notified Capital Investment Bonds notified prior to 01-06-2002.

Interest Amount

Individual and HUF

10(15)(iic)

Interest on notified Relief Bonds.

Interest Amount

Individual and HUF

10(15)(iid)

Interest on notified bonds (notified prior to 01-06-2002) purchased in foreign exchange (subject to certain conditions)

Interest Amount

Individual, being a:

a) NRI or nominee or survivor of NRI;

b) Individual to whom bonds have been gifted by NRI.

10(15)(iv)(fa)

Interest payable by scheduled bank on deposits in foreign currency where acceptance of such deposits by the bank  is duly approved by RBI.

Interest Amount

a) Non-resident

b) Individual or HUF being a resident but not ordinary resident

10(15)(iv)(i)

Interest received from Government on deposits in notified scheme out of moneys due on account of retirement.

Interest Amount

Individual, being an employee of Central and State Government or Public Sector Company.

10(15)(viii)

Interest on deposits made on or after 01.04.2005 is an offshore banking unit referred to in Section 2(u) of the Special Economic Zones Act, 2005.

Interest Amount

Person who is a non-resident or not ordinarily resident.

30.

10(16)

Scholarships granted to meet the cost of education.

Entire Amount

Individual

31.

10(17)(i)

Daily Allowances received by members of Parliament.

Entire Amount

Individual - Member of Parliament or State Legislature or any Committee thereof.

10(17)(ii)

Any Allowance received by MP under Member of Parliament (Constituency Allowance) Rules, 1986.

Entire Amount

Individual - Member of Parliament

10(17)(iii)

Any Constituency Allowance received.

Entire Amount

Individual - Member of State Legislature

32.

10(18)

Pension received by an individual who has won specified/notified gallantry awards and family pension received by any family member of such individual

Entire Amount

Individual - Central or State Government Employees or his family member

33.

10(19)

Family pension received by the widow, children or nominated heirs of a member of the armed forces (including paramilitary forces) where death of such member has occurred in the course of operational duties (subject to prescribed conditions and circumstances)

Entire Amount

Individual - Widow or children or nominated heirs of members of the armed forces.

34.

10(19A)

Notional annual value of any one palace occupied by former Ruler.

Entire amount

Individual

34A

10(23FBB)

Any income received by a unit holder from an investment fund [being of the same nature as income chargeable under the head PGBP]

That proportion of distributed income which is of the same nature as income chargeable under the head PGBP.

Unit holder of an investment fund specified under Section 115UB

34B

10(23FD)

Any income received by a unit holder from business trust, not being that proportion of the income of business trust which is in the nature of:

a) interest received or receivable from a SPV; or

b) any income from renting or leasing or letting out any real estate asset owned directly by such business trust (REIT)

Any income (except interest received from a SPV or any rental income) distributed by business trust to its unit holders

Unit holder of a business trust.

35.

10(26)

Specified income of a member of Specified Scheduled Tribes residing in Specified Areas.

Entire Amount

Individual being a member of Scheduled Tribe

36.

10(26AAA)

Income from any source in the State of Sikkim or income by way of dividend or interest on securities (Subject to certain conditions).

Entire Amount

Individual, being a Sikkimese (other than Sikkimese Woman who, after 31-03-2008, marries non-Sikkimese)

37.

10(32)

Income of minor child clubbed under Section 64(1A) with parent’s income.

Rs. 1,500 per child or Income of Minor, whichever is lower

Individual

38.

10(37)

Capital gains arising on compulsory acquisition of urban agriculture land, if:

a) Compensation is received after 31-03-2004; and

b) Agriculture land was used by taxpayer or his parents for agricultural purpose during last two years

(Subject to certain conditions)

Entire Amount of capital gains

Individual and HUF

39.

10(43)

Amount received by an Individual as a loan under reverse mortgage scheme referred to in Section 47(xvi)

Entire Amount

Individual

S.N.

Section

Particulars

Limit of exemption

Available to

I. Deduction from Salaries

In case of normal tax regime

  •  Rs. 50,000 or the amount of the salary whichever is fess

In case of new tax regime under section 115BAC(1A)(ii)

  •  Rs. 75,000 or the amount of the salary whichever is fess

Individual - Salaried Employee & Pensioners

2.

16 (ii)

Entertainment Allowance

Least of the following is exempt from tax:

a) Rs 5,000

b) 1/5th of salary (excluding any allowance, benefits or other perquisite)

c) Actual entertainment allowance received

Individual - Government Employee & Pensioners

3.

16 (iii)

Employment Tax/Professional Tax.

Amount actually paid during the year

Individual - Salaried Employee

4.

-

Lump-sum payment made gratuitously or by way of compensation or otherwise to widow or other legal heirs of an employee who dies while still in active service [Circular No. 573, dated 21-08-1990]

Enter amount paid in lump-sum

Individual - Widow or other legal heirs of employee.

5.

-

Ex-gratia payment to a person (or legal heirs) by Central or State Government, Local Authority or Public Sector Undertaking consequent upon injury to the person or death of family member while on duty [Circular No. 776, dated 08-06-1999]

Enter amount paid as ex-gratia

Individual or legal heirs.

6.

89

Any portion of salary received in arrears or in advance or profit received in lieu of salary [Subject to certain conditions and circumstances]

Relief to the extent computed in accordance with Section 89

Individual - Salaried Employee

7.

89A

Relief from taxation in income from retirement benefit account maintained in a notified country

Relief to the extent computed in accordance with Rule 21AAA

Individual

8.

Allowances (Subject to certain conditions and circumstances)

Various allowances allowed to an employee are exempt from to tax up to certain limit*.

* Refer the document of ‘Allowance available for different category of taxpayers’

Individual - Salaried Employee

II. Income from Business and Profession

1.

44AD

Computation of income from eligible business on presumptive basis under Section 44AD provided turnover of eligible business does not exceed Rs. 2 crore (Subject to certain conditions).

Note:

 (1) If an assessee opts out of the presumptive taxation scheme, after a specified period, he cannot choose to revert back to the presumptive taxation scheme for a period of five assessment years thereafter. [Section 44AD(4)]

 (2) The turnover limit of Rs. 2 crores shall be increased to Rs. 3 crores if the amount or aggregate of the amount of cash received during the previous year does not exceed 5% of the total turnover or gross receipts of such year. The receipts through the mode of cheque or a bank draft which is not an account payee, shall be considered a receipt in cash.

Presumptive income of eligible business shall be 8 % of gross receipt or total turnover.

Note: Presumptive income shall be calculated at rate of 6% in respect of total turnover or gross receipts which is received by an account payee cheque or draft or use of electronic clearing system or any other electronic mode as may be notified.

Resident Individual, Resident HUF or Resident Partnership Firm (Other than LLP)

Computation of income from specified profession on presumptive basis if the total gross receipts from such profession do not exceed fifty lakh rupees in a previous year.

Note: if the amount of cash received during the previous year does not exceed 5% of the total gross receipt of such year then the threshold limit for total gross receipt shall be taken as Rs. 75 lakh instead of Rs. 50 lakh. The receipts through the mode of cheque or a bank draft which is not an account payee, shall be considered a receipt in cash for this purpose.

III. Deductions from Capital Gains

1.

54

Investment of long-term capital gains, arising from sale of residential house or land appurtenant thereto, in purchase/construction of one/two new residential house (Subject to certain conditions and limits).

Note:

With effect from Assessment Year 2020-21, a taxpayer has an option to make investment in two residential house properties in India. This option can be exercised by the taxpayer only once in his lifetime provided the amount of long-term capital gain does not exceed Rs. 2 crores.

Amount invested new house/houses or capital gain, whichever is lower.

Individual and HUF

2.

54B

Investment of capital gains, arising from transfer of land used for agricultural purposes by an individual or his parents or a HUF, in other agricultural land (Subject to certain conditions and limits).

Amount invested in agricultural land or capital gains, whichever is lower.

Individual and HUF

3.

54F

Investment of long-term capital gains, arising from transfer of any long term asset other than a residential house property, in one new residential house property, provided that on the date of transfer the assessee should not own more than one residential house property (Subject to certain conditions and limits).

Amount invested in one new asset X capital gains/Net Consideration

Individual and HUF

4.

54GB

Investment of long-term capital gains arising from transfer of long-term capital asset, being a residential property, for subscribing the equity shares of an eligible company and such company has, within one year from the date of subscription, utilized this amount for purchase of specified new asset (subject to certain conditions and limits).

Note:

 1.  W.e.f. April 1, 2017, eligible start-up is also included in definition of eligible company.

 2.  Provisions of this section shall not apply to any transfer of residential property made after March 31, 2017. However, in case of an investment in eligible start-up, the residential property can be transferred up to March 31, 2021.

Amount invested in new asset by eligible Co. X Capital gains/Net Consideration

Individual and HUF

IV. Deductions from Income from Other Sources

1.

56(2)(x)

Any sum of money or immovable property or movable property received on or after April 1, 2017 without consideration or for inadequate consideration*** from a relative or member of HUF (subject to certain conditions and circumstances).

Note :

1. In case of immovable property, 'inadequate consideration' shall mean difference between stamp duty value and actual consideration, if it exceeds Rs. 50,000 or amount equal to 10% of consideration, whichever is higher.

2. Any sum of money received by an individual, from any person, in respect of any expenditure actually incurred by him on his medical treatment or treatment of any member of his family in respect of any illness related to COVID-19, shall not be considered as income of such person. (subject to certain conditions)

3. Any sum of money received by family member of a person who died due to COVID-19, the money so received shall not be considered as income of the family member where such money is received from the employer of deceased person. Where the money is received from any other person or persons, the exemption amount shall be limited to Rs. 10 lakh in aggregate. (subject to certain conditions

The whole amount received from specified relatives or in specified circumstances shall not be included in taxable income.

Any person

V. General-Deductions related to certain payments

1.

80C

1. Life insurance premium for policy:

a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee

b) in case of HUF, on life of any member of the HUF

2. Sum paid under a contract for a deferred annuity:

a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)

b) in case of HUF, on life of any member of the HUF

3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]

4. Contributions by an individual made under Employees’ Provident Fund Scheme

5. Contribution to Public Provident Fund Account in the name of:

a) in case of individual, such individual or his spouse or any child of such individual

b) in case of HUF, in the name of any member there of

6. Contribution by an employee to a recognized provident fund

7. Contribution by an employee to an approved superannuation fund

8. Subscription to any notified security or notified deposit scheme of the Central Government.

For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.

Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.

9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

10. Contribution for participation in unit-linked Insurance Plan of UTI:

a) in case of an individual, in the name of the individual, his spouse or any child of such individual

b) in case of a HUF, in the name of any member thereof

11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:

a) in the case of an individual, in the name of the individual, his spouse or any child of such individual

b) in the case of a HUF, in the name of any member thereof

12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]

13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children

14. Certain payments for purchase/construction of residential house property

15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both

16. Sum paid towards notified annuity plan of LIC or other insurer

17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)

19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions

20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above.

21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.

22. Subscription to notified bonds issued by the NABARD.

23. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)

24. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

25. Contribution to Tier-II NPS account by central Government's employees.

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD(1))

Individual and HUF

2.

80CCC

Contribution to certain specified Pension Funds of LIC/other insurer (Subject to certain conditions).

Up to 1,50,000 (Subject to overall limit of Rs. 1,50,000 under Section 80C, 80CCC and 80CCD)

Individual

3.

80CCD

Contribution to Pension Scheme (NPS) notified by the Central Government (Subject to certain conditions).

Note:-

1. Deduction under section 80CCD(2) on account of contribution made by the employer to a pension scheme is not subject to ceiling limit of Rs. 1,50,000 as provided under section 80CCE.

2. Addition deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., limit of 10% of salary/gross total income

3. Any payment from NPS to an assessee because of closure or his opting out of the pension scheme is exempt to the extent of 60%. However, with effect from the assessment year 2017-18, the whole amount received by the nominee from NPS on death of the assessee shall be exempt from tax.

4. Any partial withdrawal from NPS shall be exempt to the extent of 25% of amount of contributions made by the employee.

5. Any partial withdrawal from NPS shall be exempt to the extent of 25% of amount of contributions made by the parent or guardian of minor.

Amount contributed to pension scheme or 10% of salary/gross total income*, whichever is less (subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE) shall be allowed as deduction under section 80CCD(1).

Additional deduction to the extent of Rs. 50,000 shall also be available to the assessee under section 80CCD(1B). The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under Section 80CCE.

Note: The benefit of additional deduction ofupto Rs. 50,000 under section 80CCD(1B) is also availableto sum deposited to the account of minor by parent or guardian (effective from AY 2026-27)

Contribution made by employer shall also be allowed as deduction under section 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 14% of salary in case of central/state Govt. employees and 10%** in any other employees.

*10% of salary in case of employees otherwise 20% of gross total income.

**14% in case income of assessee is chargeable to tax under section 115BAC

Individual

4.

80CCG

Amount invested by specified resident individuals in listed shares or listed units in accordance with notified scheme for a lock-in period of 3 years (Subject to certain conditions).

Note: No deduction shall be allowed under this Section from Assessment Year 2018-19. However, an assessee who has claimed deduction under this Section earlier shall be allowed deduction till assessment year 2019-20.

Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired

Specified Resident Individual

5.

80D

Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person*. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up.

* specified person means:

- In case of Individual - self, spouse, dependent children or parents

- In case of HUF - Any member thereof

Note:

1. Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

2. Payment on account of preventive health check-up may be made in cash.

3. Within overall limit, deduction shall also be allowed up to Rs. 50,000 towards medical expenditure incurred on the health of specified person provided such person is a senior citizen and no amount has been paid to effect or to keep in force an insurance on the health of such person.

4. 'Senior citizen' means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

In case of Individual, amount paid:

a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen)

b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 50,000 if parent is a senior citizen)

In case of HUF, up to Rs. 25,000 (Rs. 50,000 if specified person is a senior citizen).

Individual/HUF

6.

80DD

a) Any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependent, being a person with disability

b) Any amount paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability

(Subject to certain conditions).

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Note:

"dependant" means—

(i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;

(ii) in the case of a HUF, any member thereof,

dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year.

Resident Individual and HUF

7.

80DDB

Expenses actually paid for medical treatment of specified diseases and ailments for:

a) In case of Individual: Assessee himself or wholly dependent spouse, children, parents, brothers and sisters

b) In case of HUF: Any member of the family who is wholly dependent upon the family

(Subject to certain conditions).

Up to Rs. 40,000 (Rs. 100,000 in case of senior citizen)

With effect from assessment year 2016-17, the prescription for medical treatment may be obtained from any specialist doctor not necessarily from a doctor working in Government hospital only.

Resident Individual and HUF

8.

80E

Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education (Subject to certain conditions).

The amount of interest paid during initial year and 7 immediately succeeding assessment years (or until the above interest is paid in full).

Individual

9.

80EE

Interest payable on loan taken up to Rs. 35 lakhs by taxpayer from any financial institution, sanctioned during the FY 2016-17, for the purpose of acquisition of a residential house property whose value doesn't exceed Rs. 50 lakhs.

Note:

 1.  On the date of sanction of loan, taxpayer should not own any other residential house property.

Deduction of up to Rs. 50,000 towards interest on loan.

Individual

9A.

80EEA

Interest payable on loan taken by an individual, who is not eligible to claim deduction under section 80EE, from any financial institution during the period beginning from 01/04/2019 ending on 31/03/2022 for the purpose of acquisition of a residential house property whose stamp duty value doesn’t exceed Rs. 45 lakhs

Deduction of up to Rs. 1,50,000 towards interest on loan

Individual

9B.

80EEB

Interest payable on loan taken by an individual from any financial institution during the period beginning from 01/04/2019 and ending on 31/03/2023 to purchase an electric vehicle.

Deduction of up to Rs. 1,50,000 towards interest on loan

Individual

10.

80GG

Rent paid for furnished/unfurnished residential accommodation (Subject to certain conditions)

Least of the following shall be exempt from tax:

a) Rent paid in excess of 10% of total income*;

b) 25% of the Total Income; or

c) Rs. 5,000 per month.

Total Income = Gross total income minus long term capital gains, short-term capital gains under section 111A, deductions under sections 80C to 80U (other than 80GG) and income under section 115A

Individual not receiving HRA

11.

80QQB

Royalty income of authors of certain specified category of books other than text books

Least of the following shall be exempt from tax:

a) In case of Lump sum payment - Amount of royalty income subject to maximum of Rs. 3,00,000

b) In other cases — amount of such income subject to maximum of 15% of value of books sold during the previous year.

Resident Individual — Authors

12.

80RRB

Royalty in respect of patents registered on or after 01.04.2003 (subject to certain conditions)

100% of royalty subject to maximum of Rs. 3,00,000

Resident Individual-Patentee

13.

80TTA

Interest on deposits in saving account with a banking company, a post office, co-operative society engaged in banking business, etc. (Subject to certain conditions)

100% of amount of such income subject to maximum of Rs. 10,000

Individual and HUF (Other than Resident Senior Citizen)

15.

80U

A resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995]

Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Resident Individual

S.N.

Section

Particulars

Nature of exemption

Available to

1.

194C

Lower rate of TDS under Section 194C in case of payments to a contractor or sub-contractor

Tax is required to be deducted only if sum paid exceeds Rs. 30,000 or aggregate of sum paid during the financial year exceeds Rs. 1,00,000.

Deduction of tax at source at 1% if recipient is an Individual or HUF

Individual or HUF

No TDS from interest paid or payable on time deposit:

 a)  Up to Rs. 1,00,000 in case of resident senior citizen

 b)  Up to Rs. 50,000 in case of other assesse

• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.

• If the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.

Specified person means:

 a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;

 b) An individual or a HUF who does not have any income under the head profits and gains of business or profession.

3.

-

No obligation to deduct tax at source under Section 194A, 194C, 194H, 194-I and 194J if an Individual or HUF carries on a business or profession and total sales, turnover or gross receipts from such business or profession does not exceed, Rs. 1 crore in case of business and Rs. 50 lakhs in case of profession, during the financial year immediately preceding the financial year in which sum is to be credited or paid.

Not liable to deduct tax at source

Individual or HUF

4.

197A(1)

No deduction of tax shall be made under Sections 194 and 194EE, if resident individual furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

No tax shall be deducted from specified payments if the sum paid does not exceed the maximum amount which is not chargeable to tax

Resident Individual

5.

197A(1C)

No deduction of tax shall be made under section 192A, 193, 194, 194A, 194D, 194DA, 194EE, 194-I and 194K if resident senior citizen furnishes to the payer a written declaration in prescribed form that tax on his estimated total income of the previous year will be nil.

No tax shall be deducted from specified payments

Resident Individual — Senior Citizen and Super Senior Citizen

6.

207(2)

Exemption from payment of advance tax by a resident senior citizen or resident super senior citizen not having any income from business or profession

(who is at least 60 Years of age at any time during the previous year)

Not liable to pay advance tax

Resident Senior Citizen and Resident Super Senior Citizen

7.

44AD

Assessee who has opted for presumptive taxation scheme under Section 44AD

No need to pay advance tax in installments. Assessee can pay whole amount in one installment on or before 15^th March of the financial year

Resident individual, Resident HUF or Resident Partnership Firm (Other than LLP)

S.N.

Section

Particulars

Nature of exemption

Available to

1.

194P

A senior citizen is not liable to furnish the return of income for the previous year in which tax has been deducted under section 194P

No requirement to file return of income by senior citizen if:

 c) His total income consists only income in the nature of pension and interest received or receivable from any account maintained with deductor (such bank); and

 d) Tax on such income is deducted by deductor on the basis of rates in force.

Resident Senior citizens (whose age is 75 years or more)

S. N.

Section

Particulars

Benefits

A.

Allowances

1.

10(13A)

House Rent Allowance (Sec. 10(13A) & Rule 2A)

Least of the following is exempt:

a) Actual HRA Received

b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)

c) Rent paid minus 10% of salary

* Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:

  i.  Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent

 ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].

2.

10(14)

Children Education Allowance

Up to Rs. 100 per month per child up to a maximum of 2 children is exempt

3.

10(14)

Hostel Expenditure Allowance

Up to Rs. 300 per month per child up to a maximum of 2 children is exempt

4.

10(14)

Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between place of residence and place of duty

Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities

5.

Sec. 10(14)

Transport Allowance to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.

Amount of exemption shall be lower of following:

a) 70% of such allowance; or

b) Rs. 10,000 per month.

6.

10(14)

Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office

Exempt to the extent of expenditure incurred

7.

10(14)

Any Allowance granted to meet the cost of travel on tour or on transfer

Exempt to the extent of expenditure incurred

8.

10(14)

Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Exempt to the extent of expenditure incurred

9.

10(14)

Helper/Assistant Allowance

Exempt to the extent of expenditure incurred

10.

10(14)

Research Allowance granted for encouraging the academic research and other professional pursuits

Exempt to the extent of expenditure incurred

11.

10(14)

Uniform Allowance

Exempt to the extent of expenditure incurred

12.

10(7)

Foreign allowances or perquisites paid or allowed by Government to its employees (an Indian citizen) posted outside India

Fully Exempt

13.

-

Allowances to Judges of High Court/Supreme Court (Subject to certain conditions)

Fully Exempt.

14.

10(45)

Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:

a) Value of rent free official residence

b) Value of conveyance facilities including transport allowance

c) Sumptuary allowance

d) Leave travel concession

Fully Exempt

15.

-

Allowances paid by the UNO to its employees

Fully Exempt

16.

10(45)

Allowances to Retired Chairman/Members of UPSC (Subject to certain conditions)

Exempt subject to maximum of Rs.14,000 per month for defraying services of an orderly and for secretarial assistant on contract basis.

The value of residential telephone free of cost and the number of free calls to the extent of 1500 per month shall be exempt.

17.

Sec. 10(14)

Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month.

18.

Sec. 10(14)

Border area allowances, Remote Locality allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month.

19.

Sec. 10(14)

Tribal area allowance given in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Odisha

Rs. 200 per month

20.

Sec. 10(14)

Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Rs. 2,600 per month

21.

Sec. 10(14)

Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Rs. 1,000 per month

22.

Sec. 10(14)

Counter Insurgency Allowance granted to members of Armed Forces operating in areas away from their permanent locations. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Rs. 3,900 per month

23.

Sec. 10(14)

Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines

Up to Rs. 800 per month

24.

Sec. 10(14)

High Altitude Allowance is granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)

a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)

b) Up to Rs. 1,600 per month (for altitude above 15,000 feet)

25.

Sec. 10(14)

Highly active field area allowance granted to members of armed forces (Subject to certain conditions and locations)

Up to Rs. 4,200 per month

26.

Sec. 10(14)

Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)

Up to Rs. 3,250 per month

B.

Perquisites

1.

17(2)(i)/(ii)

read with

Rule 3(1)

Rent free unfurnished accommodation provided to Central and State Government employees

License Fees determined in accordance with rules framed by Government for allotment of houses shall be deemed to be the taxable value of perquisites.

2.

17(2)(i)/(ii)

read with

Rule 3(1)

Unfurnished rent free accommodation provided to other employees

Taxable value of perquisites

A. If House Property is owned by the employer:

i. 10% of salary, if population of city where accommodation is provided exceeds 40 lakhs as per 2011 census

ii. 7.5% of salary, if population of city where accommodation provided exceeds 15 lakhs but does not exceed 40 lakhs as per 2011 census

iii. 5% of salary, if accommodation is provided in any other city

B. If House Property is taken on lease or rent by the employer, the perquisite value shall be :

i. Lease rent paid or payable by the employer or 10% of the salary, whichever is lower

*Salary includes:

a) Basic Pay

b) Dearness Allowance (only to the extent it forms part of retirement benefit salary)

c) Bonus

d) Commission

e) All other allowances (only taxable portion)

f) Any monetary payment which is chargeable to tax

But does not include

i. Value of any perquisite [under section 17(2)]

ii. Employer’s contribution to PF

iii. Benefits received at the time of retirement like gratuity, pension etc.

C. If same accommodation is provided for more than one year, the perquisite value shall be lower of the following:

(a) Perquisite value computed as per the above rules; or

(b) First year's perquisite value as adjusted by the Cost Inflation Index (CII).

Note:

1) Rent free accommodation is not chargeable to tax if provided to an employee working at mining site or an on-shore oil exploration site, etc.,—

(i) which is being of temporary nature (subject to conditions)

(ii) which is located in remote area.

2) Rent free accommodation if provided to High Court or Supreme Court Judges, Union Ministers, Leader of Opposition in Parliament, an official in Parliament and Serving Chairman and members of UPSC is Tax Free Perquisites.

3) The value so determined shall be reduced by the amount of rent, if any, paid by the employee.

4) If employee is transferred and retain property at both the places, the taxable value of perquisites for initial period of 90 days shall be determined with reference to only one accommodation (at the option of the assessee). The other one will be tax free. However after 90 days, taxable value of perquisites shall be charged with reference to both the accommodations.

3.

17(2)(i)/(ii)

read with

Rule 3(1)

Rent free furnished accommodation

Taxable value of perquisites

a) Find out taxable value of perquisite assuming accommodation to be provided to the employee is unfurnished

b) Add: 10% of original cost of furniture and fixtures (if these are owned by the employer) or actual higher charges paid or payable (if these are taken on rent by the employer).

Note: The value so determined shall be reduced by the amount of rent, if any, paid by the employee

4.

17(2)(i)/(ii)

read with

Rule 3(1)

A furnished accommodation in a Hotel

Taxable value of perquisites

Value of perquisite shall be lower of following:

a) Actual charges paid or payable by the employer to such hotel

b) 24% of salary

Note: Hotel accommodation will not be chargeable to tax if :

a) It is provided for a total period not exceeding in aggregate 15 days in the financial year; and

b) Such accommodation in hotel is provided on employee’s transfer from one place to another place.

Contribution made to the account of the assessee by the employer––

(a) in a recognised provident fund;

(b) in the scheme referred to in section 80CCD(1); and

(c) in an approved superannuation fund

5C.

17(2)(viii)

read with Rule 3(2)

Motor Car / Other Conveyance

Taxable value of perquisites (See Note 1 below)

6.

17(2)(viii)

read with Rule 3(3)

Services of a domestic servant including sweeper, gardener, watchmen or personal attendant

(Taxable in case of specified employee only [See Note 4])

Taxable value of perquisite shall be salary paid or payable by the employer for such services less any amount recovered from the employee.

7.

17(2)(viii)

read with Rule 3(4)

Supply of gas, electricity or water for household purposes

Taxable value of perquisites:

1. Manufacturing cost per unit incurred by the employer., if provided from resources owned by the employer;

2. Amount paid by the employer, if purchased by the employer from outside agency

Note:

 i.  Any amount recovered from the employee shall be deducted from the taxable value of perquisite.

 ii.  Taxable in case of specified employees only [See note 4]

8.

17(2)(viii)

read with Rule 3(5)

Education Facilities

Taxable value of perquisites (See Note 2 below)

9.

17(2)(viii)

read with Rule 3(6)

Transport facilities provided by the employer engaged in carriage of passenger or goods (except Airlines or Railways)

(Taxable in case of specified employee only [See Note 4])

Value at which services are offered by the employer to the public less amount recovered from the employee shall be a taxable perquisite

10.

17(2)(v)

Amount payable by the employer to effect an insurance on life of employee or to effect a contract for an annuity

Fully Taxable

11.

17(2)(vi) read with Rule 3(8)/3(9)

ESOP/ Sweat Equity Shares

Taxable value of perquisites

Fair Market value of shares or securities on the date of exercise of option by the assessee less amount recovered from the employee in respect of such shares shall be the taxable value of perquisites.

Fair Market Value shall be determined as follows:

 a) In case of listed Shares: Average of opening and closing price as on date of exercise of option (Subject to certain conditions and circumstances)

 b) In case of unlisted shares/ security other than equity shares: Value determined by a Merchant Banker as on date of exercise of option or an earlier date, not being a date which is more than 180 days earlier than the date of exercise of the option.

Note:

The Finance Act, 2020 has deferred the taxation of perquisite in case of start-ups from date of allotment to the earliest of the following three dates:

1. Expiry of 48 months from the end of the relevant assessment year;

2. Sale of such shares by the employees;

3. Date on which employee ceases to be employee of the start-up.

The eligible start-up shall accordingly, be required to deposit tax with the government within 14 days of the happening of any of the above events (whichever is earlier). However, 17(2)(vi) has not been amended, thus the income shall be computed in the year in which shares are allotted but tax shall be paid in subsequent year.

12.

17(2)(vii)

Employer’s contribution towards:

 a)  recognised provided fund

 b)  NPS (Section 80CCD(1))

 c)  Approved Superannuation fund

Taxable in the hands of employee to the extent such contribution exceed Rs.7,50,000

13.

17(2)(viii) read with Rule 3(7)(i)

Interest free loan or Loan at concessional rate of interest

Interest free loan or loan at concessional rate of interest given by an employer to the employee (or any member of his household) is a perquisite chargeable to tax in the hands of all employees on following basis:

 1. Find out the ‘maximum outstanding monthly balance’ (i.e. the aggregate outstanding balance for each loan as on the last day of each month);

 2. Find out rate of interest charged by the SBI as on the first day of relevant previous year in respect of loan for the same purpose advanced by it;

 3. Calculate interest for each month of the previous year on the outstanding amount (mentioned in point 1) at the rate of interest (given in point 2)

 4. Interest actually recovered, if any, from employee

 5. The balance amount (point 3-point 4) is taxable value of perquisite

Nothing is taxable if:

 a) Loan in aggregate does not exceed Rs 20,000

 b) Loan is provided for treatment of specified diseases ( Rule 3A) like neurological diseases, Cancer, AIDS, Chronic renal failure, Hemophilia (specified diseases). However, exemption is not applicable to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.

14.

17(2)(viii) read with Rule 3(7)(ii)

Facility of travelling, touring and accommodation availed of by the employee or any member of his household for any holiday

a) Perquisite value taxable in the hands of employee shall be expenditure incurred by the employer less amount recovered from employee.

b) Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public less amount recovered from employee.

15.

17(2)(viii) read with Rule 3(7)(iii)

Free food and beverages provided to the employee

1) Fully Taxable: Free meals in excess of Rs. 50 per meal less amount paid by the employee shall be a taxable perquisite

2) Exempt from tax: Following free meals shall be exempt from tax

 a) Food and non-alcoholic beverages provided during working hours in remote area or in an offshore installation;

 b) Tea, Coffee or Non-Alcoholic beverages and Snacks during working hours are tax free perquisites;

 c) Food in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer is not taxable, if cost to the employer is Rs. 50(or less) per meal.

16.

17(2)(viii) read with Rule 3(7)(iv)

Gift or Voucher or Coupon on ceremonial occasions or otherwise provided to the employee

a) Gifts in cash or convertible into money (like gift cheque) are fully taxable

b) Gift in kind up to Rs.5,000 in aggregate per annum would be exempt, beyond which it would be taxable.

17.

17(2)(viii) read with Rule 3(7)(v)

Credit Card

a) Expenditure incurred by the employer in respect of credit card used by the employee or any member of his household less amount recovered from the employee is a taxable perquisite

b) Expenses incurred for official purposes shall not be a taxable perquisite provided complete details in respect of such expenditure are maintained by the employer

18.

17(2)(viii) read with Rule 3(7)(vi)

Free Recreation/ Club Facilities

a) Expenditure incurred by the employer towards annual or periodical fee etc. (excluding initial fee to acquire corporate membership) less amount recovered from the employee is a taxable perquisite

b) Expenses incurred on club facilities for the official purposes are exempt from tax.

c) Use of health club, sports and similar facilities provided uniformly to all employees shall be exempt from tax.

19.

17(2)(viii) read with Rule 3(7)(vii)

Use of movable assets of the employer by the employee is a taxable perquisite

Taxable value of perquisites

a) Use of Laptops and Computers: Nil

b) Movable asset other than Laptops, computers and Motor Car*: 10% of original cost of the asset (if asset is owned by the employer) or actual higher charges incurred by the employer (if asset is taken on rent) less amount recovered from employee.

*See Note 1 for computation of perquisite value in case of use of the Motor Car

20.

17(2)(viii) read with Rule 3(7)(viii)

Transfer of movable assets by an employer to its employee

Taxable value of perquisites

a) Computers, Laptop and Electronics items: Actual cost of asset less depreciation at 50% (using reducing balance method) for each completed year of usage by employer less amount recovered from the employee

b) Motor Car: Actual cost of asset less depreciation at 20% (using reducing balance method) for each completed year of usage by employer less amount recovered from the employee

c) Other movable assets: Actual cost of asset less depreciation at 10% (on SLM basis) for each completed year of usage by employer less amount recovered from the employee.

21.

17(2)(viii) read with Rule 3(7)(ix)

Any other benefit or amenity extended by employer to employee

Taxable value of perquisite shall be computed on the basis of cost to the employer (under an arm’s length transaction) less amount recovered from the employee.

However expenses on telephones including a mobile phone incurred by the employer on behalf of employee shall not be treated as taxable perquisite.

22.

10(10CC)

Tax paid by the employer on perquisites (not provided for by way of monetary payments) given to employee

Fully exempt

23.

10(5)

Leave Travel Concession or Assistance (LTC/LTA), extended by an employer to an employee for going anywhere in India along with his family*

*Family includes spouse, children and dependent brother/sister/parents. However, family doesn’t include more than 2 children of an Individual born on or after 01-10-1998.

The exemption shall be limited to fare for going anywhere in India along with family twice in a block of four years:

i. Exemption limit where journey is performed by Air - Air fare of economy class in the National Carrier by the shortest route or the amount spent, whichever is less

ii. Exemption limit where journey is performed by Rail - Air-conditioned first class rail fare by the shortest route or the amount spent, whichever is less

iii. Exemption limit if places of origin of journey and destination are connected by rail but the journey is performed by any other mode of transport - Air-conditioned first class rail fare by the shortest route or the amount spent, whichever is less

iv. Exemption limit where the places of origin of journey and destination are not connected by rail:

a. Where a recognized public transport system exists - First Class or deluxe class fare by the shortest route or the amount spent, whichever is less

b. Where no recognized public transport system exists - Air conditioned first class rail fare by shortest route or the amount spent, whichever is less

Notes:

i. Two journeys in a block of 4 calendar years is exempt

ii. Taxable only in case of Specified Employees [See note 4]

24.

Proviso to section 17(2)

Medical facilities in India

1) Expense incurred or reimbursed by the employer for the medical treatment of the employee or his family (spouse and children, dependent - parents, brothers and sisters) in any of the following hospital is not chargeable to tax in the hands of the employee:

a)  Hospital maintained by the employer.

b)  Hospital maintained by the Government or Local Authority or any other hospital approved by Central Government

c)  Hospital approved by the Chief Commissioner having regard to the prescribed guidelines for treatment of the prescribed diseases.

2) Medical insurance premium paid or reimbursed by the employer is not chargeable to tax.

25.

Proviso to section 17(2)

Medical facilities outside India

Any expenditure incurred or reimbursed by the employer for medical treatment of the employee or his family member outside India is exempt to the extent of following (subject to certain condition):

a) Expenses on medical treatment - exempt to the extent permitted by RBI.

b) Expenses on stay abroad for patient and one attendant - exempt to the extent permitted by RBI.

c) Cost on travel of the employee or any family or one attendant - exempt, if Gross Total Income (before including the travel expenditure) of the employee, does not exceed such amount as may be prescribed.

26.

Proviso to section 17(2)

Medical facility or reimbursement for COVID-19 treatment

Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in respect of any illness relating to Covid-19, shall not be taxable as perquisite in the hands of the employee. However, this benefit shall be allowed subject to certain conditions as may be notified by the Government in this behalf. [applicable w.e.f. Assessment Year 2020-21]

C.

Deduction from salary

In case of normal tax regime

  •  Rs. 50,000 or the amount of salary, whichever is lower

In case of new tax regime under section 115BAC(1A)(ii)

  •  Rs. 75,000 or the amount of salary, whichever is lower

2.

16 (ii)

Entertainment Allowance received by the Government employees (Fully taxable in case of other employees)

Least of the following is deductible :

a) Rs 5,000

b) 1/5th of salary (excluding any allowance, benefits or other perquisite)

c) Actual entertainment allowance received

3.

16(iii)

Employment Tax/Professional Tax.

Amount actually paid during the year  is deductible. However, if professional tax is paid by the employer on behalf of its employee than it is first included in the salary of the employee as a perquisite and then same amount is allowed as deduction.

D.

Retirement Benefits

a) Leave Encashment

1.

10(10AA)

Encashment of unutilized earned leave at the time of retirement of Government employees

Fully Exempt

2.

10(10AA)

Encashment of unutilized earned leave at the time of retirement of other employees (not being a Government employee)

Least of the following shall be exempt from tax:

a) Amount actually received

b) Unutilized earned leave* X Average monthly salary

c) 10 months Average Salary**

d) Rs. 25,00,000

*While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each year of service rendered to the current employer

**Average salary = Average Salary*** of last 10 months immediately preceding the retirement

***Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

b) Retrenchment Compensation

1.

10(10B)

Retrenchment Compensation received by a workman under the Industrial Dispute Act, 1947 (Subject to certain conditions).

Least of the following shall be exempt from tax:

a) an amount calculated as per section 25F(b) of the Industrial Disputes Act, 1947;

b) Rs. 5,00,000; or

c) Amount actually received

Note:

 i. Relief under Section 89(1) is available

ii. 15 days average pay for each completed year of continuous service or any part thereof in 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 Employees (Other than employees of statutory corporations)

Fully Exempt

2.

10(10)(ii)

Death -cum-Retirement Gratuity received by other employees who are covered under Gratuity Act, 1972 (other than Government employee) (Subject to certain conditions).

Least of following amount is exempt from tax:

1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

2. Rs. 20,00,000

3. Gratuity actually received.

*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)(iii)

Death -cum-Retirement Gratuity received by other employees who are not covered under Gratuity Act, 1972 (other than Government employee) (Subject to certain conditions).

Least of following amount is exempt from tax:

1. Half month’s Average Salary* X Completed years of service

2. Rs. 20,00,000

3. Gratuity actually received.

*Average salary = Average Salary of last 10 months immediately preceding the month of retirement

** Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

d) Pension

1.

-

Pension received from United Nation Organization by the employee of his family members

Fully Exempt

2.

10(10A)(i)

Commuted Pension received by an employee Central Government, State Government, Local Authority Employees and Statutory Corporation

Fully Exempt

3.

10(10A)(ii)

Commuted Pension received by other employees who also receive gratuity

1/3 of full value of commuted pension will be exempt from tax

4.

10(10A)(iii)

Commuted Pension received by other employees who do not receive any gratuity

1/2 of full value of commuted pension will be exempt from tax

5.

10(19)

Family Pension received by the family members of Armed Forces

Fully Exempt

6.

57(iia)

Family pension received by family members in any other case

In case of normal tax regime:

  •  33.33% of Family Pension subject to maximum of Rs. 15,000

In case of new tax regime under section 115BAC(1A)(ii)

  •  33.33% of Family Pension subject to maximum of Rs. 25,000

e) Voluntary Retirement

1.

10(10C)

Amount received on Voluntary Retirement or Voluntary Separation (Subject to certain conditions)

Least of the following is exempt from tax:

1) Actual amount received as per the guidelines i.e. least of the following

a) 3 months salary for each completed year of services

b) Salary at the time of retirement X No. of months of services left for retirement; or

2) Rs. 5,00,000

f) Provident Fund

1.

-

Employee’s Provident Fund

For taxability of contribution made to various employee’s provident fund and interest arising thereon see Note 3.

g) National Pension System (NPS)

Any payment from the National Pension System Trust to an assessee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD, to the extent it does not exceed 60% of the total amount payable to him at the time of such closure or his opting out of the scheme.

Note: Partial withdrawal from the NPS shall be exempt to the extent of 25% of amount of contributions made by the employee.

E.

Arrear of Salary and relief under section 89(1)

1.

15

Arrear of salary and advance salary

Taxable in the year of receipt. However relief under section 89 is available

2.

89

Relief under Section 89

If an individual receives any portion of his salary in arrears or in advance or receives profits in lieu of salary, he can claim relief as per provisions of section 89 read with rule 21A

3.

89A

Relief under Section 89A

Relief from taxation in income from retirement benefit account maintained in a notified country in accordance with rule 21AAA

F.

Other Benefits

1.

-

Lump-sum payment made gratuitously or by way of compensation or otherwise to widow or other legal heirs of an employee who dies while still in active service [Circular No. 573, dated 21-08-1990]

Fully Exempt in the hands of widow or other legal heirs of employee

2.

-

Ex-gratia payment to a person (or legal heirs) by Central or State Government, Local Authority or Public Sector Undertaking consequent upon injury to the person or death of family member while on duty [Circular No. 776, dated 08-06-1999]

Fully Exempt in the hands of individual or legal heirs

3.

-

Salary received from United Nation Organization [Circular No. 293, dated 10-02-1981]

Fully Exempt

4.

10(6)(ii)

Salary received by foreign national as an officials of an embassy, high commission, legation, consulate or trade representation of a foreign state

Fully Exempt if corresponding official in that foreign country enjoys a similar exemption

5.

10(6)(vi)

Remuneration received by non-resident foreign citizen as an employee of a foreign enterprise for services rendered in India, if:

a) Foreign enterprise is not engaged in any trade or business in India

b) His stay in India does not exceed in aggregate a period of 90 days in such previous year

c) Such remuneration is not liable to deducted from the income of employer chargeable under this Act

Fully exempt

6.

10(6)(viii)

Salary received by a non-resident foreign national for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year.

Fully exempt

7.

-

Salary and allowances received by a teacher /professor from SAARC member state (Subject to certain conditions).

Fully Exempt

S. No.

Circumstances

Engine Capacity upto 1600 cc (value of perquisite )

Engine Capacity above 1600 cc (value of perquisite)

1

Motor Car is owned or hired by the employer

1.1

Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.

1.1-A

If car is used wholly and exclusively in the performance of official duties.

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

1.1-B

If car is used exclusively for the personal purposes of the employee or any member of his household.

Actual amount of expenditure incurred by the employer on the running and maintenance of motor car including remuneration paid by the employer to the chauffeur and increased by the amount representing normal wear and tear of the motor car at 10% p.a. of the cost of vehicle less any amount charged from the employee for such use is taxable

1.1-C

The motor car is used partly in the performance of duties and partly for personal purposes of the employee or any member of his household.

Rs. 1,800 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car)

Rs. 2,400 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car)

Nothing is deductible in respect of any amount recovered from the employee.

1.2

Where maintenances and running expenses are met by the employee.

1.2-A

If car is used wholly and exclusively in the performance of official duties.

Not a perquisite, hence, not taxable

Not a perquisite, hence, not taxable

1.2-B

If car is used exclusively for the personal purposes of the employee or any member of his household

Expenditure incurred by the employer (i.e. hire charges, if car is on rent or normal wear and tear at 10% of actual cost of the car) plus salary of chauffeur if paid or payable by the employer minus amount recovered from the employee.

1.2-C

The motor car is used partly in the performance of duties and partly for personal purposes of the employee or any member of his household

Rs. 600 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car)

Rs. 900 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car)

Nothing is deductible in respect of any amount recovered from the employee.

2

Motor Car is owned by the employee

2.1

Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.

2.1-A

The reimbursement is for the use of the vehicle wholly and exclusively for official purposes

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

2.1-B

The reimbursement is for the use of the vehicle exclusively for the personal purposes of the employee or any member of his household

Actual expenditure incurred by the employer minus amount recovered from the employee

2.1-C

The reimbursement is for the use of the vehicle partly for official purposes and partly for personal purposes of the employee or any member of his household.

Actual expenditure incurred by the employer minus Rs. 1800 per month and Rs. 900 per month if chauffer is also provided minus amount recovered from employee.

Actual expenditure incurred by the employer minus Rs. 2400 per month and Rs. 900 per month if chauffer is also provided minus amount recovered from employee.

3

Where the employee owns any other automotive conveyance and actual running and maintenance charges are met or reimbursed by the employer

3.1

Reimbursement for the use of the vehicle wholly and exclusively for official purposes;

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

3.2

Reimbursement for the use of vehicle partly for official purposes and partly for personal purposes of the employee.

Actual expenditure incurred by the employer minus Rs. 900 per month minus amount recovered from employee

Not Applicable

Facility extended to

Value of perquisite

Provided in the school owned by the employer

Provided in any other school

Children

Cost of such education in similar school less Rs. 1,000 per month per child (irrespective of numbers of children) less amount recovered from employee

Amount incurred less amount recovered from employee (an exemption of Rs. 1,000 per month per child is allowed)

Other family member

Cost of such education in similar school less amount recovered from employee

Cost of such education incurred

Particulars

Taxable Value of Perquisites

Reimbursement of school fees of children or family member of employees

Fully taxable

Free educational facilities/ training of employees

Fully exempt

Particulars

Statutory provident fund

Recognized provident fund

Unrecognized provident fund

Public provident fund

Employers contribution to provident fund

Fully Exempt

Exempt only to the extent of 12% of salary*

Fully Exempt

-

Deduction under section 80C on employees contribution

Available

Available

Not Available

Available

Interest credited to provident fund
See Note

Fully Exempt

Exempt only to the extent rate of interest does not exceed 9.5%

Fully Exempt

Fully Exempt

Payment received at the time of retirement or termination of service

Fully Exempt

Fully Exempt (Subject to certain conditions and circumstances)

Fully Taxable (except employee’s contribution)

Fully Exempt

S.No.

Section

Particulars

Taxability/Exemption

1.

17

Basic salary

Fully taxable

2.

17

Dearness Allowance (referred to as ‘DA’)

Fully taxable

3.

17

Bonus, fees or commission

Fully taxable

A.

Allowances

4.

10(13A) read with Rule 2A

House rent allowance

Least of the following is exempt:

a) Actual HRA Received

b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Chennai)

c) Rent paid minus 10% of salary

* Salary = Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:

i. Fully taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent

ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10-10-2013].

5.

10(14)

Children education allowance

Up to Rs. 100 per month per child up to a maximum of 2 children is exempt

6.

10(14)

Hostel expenditure allowance

Up to Rs. 300 per month per child up to a maximum of 2 children is exempt

7.

10(14)

Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between place of residence and place of duty

Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities

8.

Sec. 10(14)

Allowance granted to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.

Amount of exemption shall be lower of following:

a) 70% of such allowance; or

b) Rs. 10,000 per month.

9.

10(14)

Conveyance allowance granted to meet the expenditure on conveyance in performance of duties of an office

Exempt to the extent of expenditure incurred for official purposes

10.

10(14)

Travelling allowance to meet the cost of travel on tour or on transfer

Exempt to the extent of expenditure incurred for official purposes

11.

10(14)

Daily allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Exempt to the extent of expenditure incurred for official purposes

12.

10(14)

Helper/Assistant allowance

Exempt to the extent of expenditure incurred for official purposes

13.

10(14)

Research allowance granted for encouraging the academic research and other professional pursuits

Exempt to the extent of expenditure incurred for official purposes

14.

10(14)

Uniform allowance

Exempt to the extent of expenditure incurred for official purposes

15.

10(7)

Any allowance or perquisite paid or allowed by Government to its employees (an Indian citizen) posted outside India

Fully Exempt

16.

-

Allowances to Judges of High Court/Supreme Court (Subject to certain conditions)

Fully Exempt.

17.

10(45)

Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:

a) Value of rent free official residence

b) Value of conveyance facilities including transport allowance

c) Sumptuary allowance

d) Leave travel concession

Fully Exempt

19.

Sec. 10(14) read with Rule 2BB

Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 300 to Rs. 7,000 per month.

20.

Sec. 10(14) read with Rule 2BB

Border area, Remote Locality or Disturbed Area or Difficult Area Allowance (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 200 to Rs. 1,300 per month.

21.

Sec. 10(14) read with Rule 2BB

Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Odisha

Up to Rs. 200 per month is exempt

22.

Sec. 10(14) read with Rule 2BB

Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 2,600 per month is exempt

23.

Sec. 10(14) read with Rule 2BB

Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 1,000 per month is exempt

24.

Sec. 10(14) read with Rule 2BB

Counter Insurgency Allowance granted to members of Armed Forces operating in areas away from their permanent locations. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 3,900 per month is exempt

25.

Sec. 10(14) read with Rule 2BB

Underground Allowance to employees working in uncongenial, unnatural climate in underground mines

Up to Rs. 800 per month is exempt

26.

Sec. 10(14) read with Rule 2BB

High Altitude Allowance granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)

a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet) is exempt

b) Up to Rs. 1,600 per month (for altitude above 15,000 feet) is exempt

27.

Sec. 10(14) read with Rule 2BB

Highly active field area allowance granted to members of armed forces (Subject to certain conditions and locations)

Up to Rs. 4,200 per month is exempt

28.

Sec. 10(14) read with Rule 2BB

Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)

Up to Rs. 3,250 per month is exempt

29.

10(14)

City Compensatory Allowance

Fully Taxable

30.

10(14)

Fixed Medical Allowance

Fully Taxable

31.

10(14)

Tiffin, Lunch, Dinner or Refreshment Allowance

Fully Taxable

32.

10(14)

Servant Allowance

Fully Taxable

33.

10(14)

Project Allowance

Fully Taxable

34.

10(14)

Overtime Allowance

Fully Taxable

35.

10(14)

Telephone Allowance

Fully Taxable

36.

10(14)

Holiday Allowance

Fully Taxable

37.

10(14)

Any Other Cash Allowance

Fully Taxable

38.

10(5)

Leave Travel Concession or Assistance (LTC/LTA), extended by an employer to an employee for going anywhere in India along with his family*

*Family includes spouse, children and dependent brother/sister/parents. However, family doesn’t include more than 2 children of an Individual born on or after 01-10-1998.

(Subject to certain conditions)

The exemption shall be limited to fare for going anywhere in India along with family twice in a block of four years:

• Where journey is performed by Air - Exemption up to Air fare of economy class in the National Carrier by the shortest route

• Where journey is performed by Rail - Exemption up to air-conditioned first class rail fare by the shortest route

• If places of origin of journey and destination are connected by rail but the journey is performed by any other mode of transport - Exemption up to air-conditioned first class rail fare by the shortest route.

• Where the places of origin of journey and destination are not connected by rail:

* Where a recognized public transport system exists - Exemption up to first Class or deluxe class fare by the shortest route

* Where no recognized public transport system exists - Exemption up to air conditioned first class rail fare by shortest route.

Notes:

i. Two journeys in a block of 4 calendar years is exempt

ii. Taxable only in case of Specified Employees [See note 4]

B.

Perquisites

39.

17(2)(i)

Rent free accommodation provided to assessee by his employer

Taxable (computed in manner prescribed by the board)

40.

17(2)(ii)

Value of any accommodation provided to assessee by his employer at concessional rate

Taxable (computed in manner prescribed by the board)

41.

17(2)(viii)

read with Rule 3(2)

Motor Car / Other Conveyance

Taxable value of perquisites (See Note 1 below)

43.

17(2)(viii)

read with Rule 3(3)

Services of a domestic servant including sweeper, gardener, watchmen or personal attendant (taxable only in case of specified employee [See Note 4])

Taxable value of perquisite shall be salary paid or payable by the employer for such services less any amount recovered from the employee.

44.

17(2)(viii)

read with Rule 3(4)

Supply of gas, electricity or water for household purposes

Taxable value of perquisites:

• Manufacturing cost per unit incurred by the employer., if provided from resources owned by the employer;

• Amount paid by the employer, if purchased by the employer from outside agency

Note:

1. Any amount recovered from the employee shall be deducted from the taxable value of perquisite.

2. Taxable in case of specified employees only [See note 4]

45.

17(2)(viii)

read with Rule 3(5)

Education Facilities

Taxable value of perquisites (See Note 2 below)

46.

17(2)(viii)

read with Rule 3(6)

Transport facilities provided by the employer engaged in carriage of passenger or goods (except Airlines or Railways)

Value at which services are offered by the employer to the public less amount recovered from the employee shall be a taxable perquisite

47.

17(2)(v)

Amount payable by the employer to effect an insurance on life of employee or to effect a contract for an annuity

Fully Taxable

48.

17(2)(vi) read with Rule 3(8)/3(9)

ESOP/ Sweat Equity Shares

Fair Market value of shares or securities on the date of exercise of option by the assessee less amount recovered from the employee in respect of such shares shall be the taxable value of perquisites.

Fair Market Value shall be determined as follows:

a) In case of listed Shares: Average of opening and closing price as on date of exercise of option (Subject to certain conditions and circumstances)

b) In case of unlisted shares/ security other than equity shares: Value determined by a Merchant Banker as on date of exercise of option or an earlier date, not being a date which is more than 180 days earlier than the date of exercise of the option.

Note:

The Finance Act, 2020 has deferred the taxation of perquisite in case of start-ups from date of allotment to the earliest of the following three dates:

1. Expiry of 48 months from the end of the relevant assessment year;

2. Sale of such shares by the employees;

3. Date on which employee ceases to be employee of the start-up.

The eligible start-up shall accordingly, be required to deposit tax with the government within 14 days of the happening of any of the above events (whichever is earlier).

However, Section 17(2)(vi) has not been amended, thus the income shall be computed in the year in which shares are allotted but tax shall be paid in subsequent year.

49.

17(2)(vii)

Employer’s contribution towards superannuation fund national pension scheme and recognised provident fund.

Taxable in the hands of employee to the extent such contribution exceeds Rs.7,50,000

50.

17(2)(viii) read with Rule 3(7)(i)

Interest free loan or Loan at concessional rate of interest

Interest free loan or loan at concessional rate of interest given by an employer to the employee (or any member of his household) is a perquisite chargeable to tax in the hands of all employees on following basis:

 1) Find out the “maximum outstanding monthly balance” (i.e. the aggregate outstanding balance for each loan as on the last day of each month);

 2) Find out rate of interest charged by the SBI as on the first day of relevant previous year in respect of loan for the same purpose advanced by it;

 3) Calculate interest for each month of the previous year on the outstanding amount (mentioned in Step 1) at the rate of interest given in Step 2

 4) From the total interest calculated for the entire previous year (step 3), deduct interest actually recovered, if any, from employee

 5) The balance amount (Step 3-Step 4) is taxable value of perquisite

Nothing is taxable if:

a) Loan in aggregate does not exceed Rs. 20,000; or

b) Loan is provided for treatment of specified diseases ( Rule 3A) like neurological diseases, Cancer, AIDS, Chronic renal failure, Hemophilia (specified diseases). However, exemption is not applicable to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.

51.

17(2)(viii) read with Rule 3(7)(ii)

Facility of travelling, touring and accommodation availed of by the employee or any member of his household for any holiday

a) Taxable value of perquisite shall be expenditure incurred by the employer less amount recovered from employee.

b) Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public.

52.

17(2)(viii) read with Rule 3(7)(iii)

Free food and beverages provided to the employee

 1) Fully Taxable: Free meals in excess of Rs. 50 per meal less amount paid by the employee shall be a taxable perquisite

 2) Exempt from tax: Following free meals shall be exempt from tax:

a) Food and non-alcoholic beverages provided during working hours in remote area or in an offshore installation;

b) Tea, Coffee or Non-Alcoholic beverages and Snacks during working hours are tax free perquisites;

c) Food in office premises or through non-transferable paid vouchers usable only at eating joints provided by an employer is not taxable, if cost to the employer is Rs. 50(or less) per meal.

53.

17(2)(viii) read with Rule 3(7)(iv)

Gift or Voucher or Coupon on ceremonial occasions or otherwise provided to the employee

a) Gifts in cash or convertible into money (like gift cheque) are fully taxable

b) Gift in kind below Rs.5,000 in aggregate per annum would be exempt, beyond which it would be taxable.

54.

17(2)(viii) read with Rule 3(7)(v)

Credit Card

 a)  Expenditure incurred by the employer in respect of credit card used by the employee or any member of his household less amount recovered from the employee is a taxable perquisite

 b)  Expenses incurred for official purposes shall not be a taxable perquisite provided complete details in respect of such expenditure are maintained by the employer

55.

17(2)(viii) read with Rule 3(7)(vi)

Free Recreation/ Club Facilities

 a)  Expenditure incurred by the employer towards annual or periodical fee etc. (excluding initial fee to acquire corporate membership) less amount recovered from the employee is a taxable perquisite

 b)  Expenses incurred on club facilities for the official purposes are exempt from tax.

 c)  Use of health club, sports and similar facilities provided uniformly to all employees shall be exempt from tax.

56.

17(2)(viii) read with Rule 3(7)(vii)

Use of movable assets of the employer by the employee is a taxable perquisite

Taxable value of perquisites

a) Use of Laptops and Computers: Nil

b) Movable asset other than Laptops, computers and Motor Car*: 10% of original cost of the asset (if asset is owned by the employer) or actual higher charges incurred by the employer (if asset is taken on rent) less amount recovered from employee.

*See Note 1 for computation of perquisite value in case of use of the Motor Car

57.

17(2)(viii) read with Rule 3(7)(viii)

Transfer of movable assets by an employer to its employee

Taxable value of perquisites

a) Computers, Laptop and Electronics items: Actual cost of asset less depreciation at 50% (using reducing balance method) for each completed year of usage by employer less amount recovered from the employee

b) Motor Car: Actual cost of asset less depreciation at 20% (using reducing balance method) for each completed year of usage by employer less amount recovered from the employee

c) Other movable assets: Actual cost of asset less depreciation at 10% (on SLM basis) for each completed year of usage by employer less amount recovered from the employee.

58.

17(2)(viii) read with Rule 3(7)(ix)

Any other benefit or amenity extended by employer to employee

Taxable value of perquisite shall be computed on the basis of cost to the employer (under an arm’s length transaction) less amount recovered from the employee.

However, expenses on telephones including a mobile phone incurred by the employer on behalf of employee shall not be treated as taxable perquisite.

59.

10(10CC)

Tax paid by the employer on perquisites (not provided for by way of monetary payments) given to employee

Fully exempt

60.

Proviso to section 17(2)

Medical facilities in India

 a)  Expense incurred or reimbursed by the employer for the medical treatment of the employee or his family (spouse and children, dependent - parents, brothers and sisters) in any of the following hospital is not chargeable to tax in the hands of the employee:

  i.  Hospital maintained by the employer.

  ii.  Hospital maintained by the Government or Local Authority or any other hospital approved by Central Government

  iii.  Hospital approved by the Chief Commissioner having regard to the prescribed guidelines for treatment of the prescribed diseases.

 b)  Medical insurance premium paid or reimbursed by the employer is not chargeable to tax.

However, the medical facility is taxable only in case of Specified Employees [See note 4]

61.

Proviso to section 17(2)

Medical facilities outside India

Any expenditure incurred or reimbursed by the employer for medical treatment of the employee or his family member outside India is exempt to the extent of following (subject to certain condition):

  a.  Expenses on medical treatment - exempt to the extent permitted by RBI.

  b.  Expenses on stay abroad for patient and one attendant - exempt to the extent permitted by RBI.

  c.  Expenditure incurred on travelling of patient and one attendant- exempt, if Gross Total Income (before including the travel expenditure) of the employee, does not exceed Rs. 2,00,000.

62.

Proviso to section 17(2)

Medical facility or reimbursement for COVID-19 treatment

Any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in respect of any illness relating to Covid-19, shall not be taxable as perquisite in the hands of the employee. However, this benefit shall be allowed subject to certain conditions as may be notified by the Government in this behalf. [applicable w.e.f. Assessment Year 2020-21]

C.

Deduction from salary

In case of normal tax regime

  •  Rs. 50,000 or the amount of salary, whichever is lower

In case of new tax regime under section 115BAC(1A)(ii)

  •  Rs. 75,000 or the amount of salary, whichever is lower

2.

16 (ii)

Entertainment Allowance received by the Government employees (Fully taxable in case of other employees)

Least of the following is exempt from tax:

a) Rs 5,000

b) 1/5th of salary (excluding any allowance, benefits or other perquisite)

c) Actual entertainment allowance received

3.

16(iii)

Employment Tax/Professional Tax.

Amount actually paid during the year. However, if professional tax is paid by the employer on behalf of its employee than it is first included in the salary of the employee as a perquisite and then same amount is allowed as deduction.

D.

Retirement Benefits

Leave Encashment

1.

10(10AA)

Encashment of unutilized earned leave at the time of retirement of Government employees

Fully Exempt

2.

10(10AA)

Encashment of unutilized earned leave at the time of retirement of other employees (not being a Government employee)

Least of the following shall be exempt from tax:

a) Amount actually received

b) Unutilized earned leave* X Average monthly salary

c) 10 months Average Salary**

d) Rs. 25,00,000

* While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each completed year of service rendered to the current employer

** Average salary = Average Salary*** of last 10 months immediately preceding the retirement

***Salary = Basic Pay + DA (to the extent it forms part of retirement benefits)+ turnover based commission

Retrenchment Compensation

3.

10(10B)

Retrenchment Compensation received by a workman under the Industrial Dispute Act, 1947 (Subject to certain conditions).

Least of the following shall be exempt from tax:

a) Amount calculated as per section 25F(b)of the Industrial Disputes Act, 1947;

b) Rs. 5,00,000; or

c) Amount actually received

Note:

i. Relief under Section 89(1) is available

ii. 15 days average pay for each completed year of continuous service or any part thereof in excess of 6 months is to be adopted under section 25F(b) of the Industrial Disputes Act, 1947

Gratuity

4.

10(10)(i)

Gratuity received by Government Employees (Other than employees of statutory corporations)

Fully Exempt

5.

10(10)(ii)

Death -cum-Retirement Gratuity received by other employees who are covered under Gratuity Act, 1972 (other than Government employee) (Subject to certain conditions).

Least of following amount is exempt from tax:

 1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

 2. Rs. 20,00,000

 3. Gratuity actually received.

*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

6.

10(10)(iii)

Death -cum-Retirement Gratuity received by other employees who are not covered under Gratuity Act, 1972 (other than Government employee) (Subject to certain conditions).

Least of following amount is exempt from tax:

1. Half month’s Average Salary* X Completed years of service

2. Rs. 20,00,000

3. Gratuity actually received.

*Average salary = Average Salary of last 10 months immediately preceding the month of retirement

** Salary = Basic Pay + DA (to the extent it forms part of retirement benefits)+ turnover based commission

Pension

7.

-

Pension received from United Nation Organization by the employee of his family members

Fully Exempt

8.

10(10A)(i)

Commuted Pension received by an employee of Central Government, State Government, Local Authority Employees and Statutory Corporation

Fully Exempt

9.

10(10A)(ii)

Commuted Pension received by other employees who also receive gratuity

1/3 of full value of commuted pension will be exempt from tax

10.

10(10A)(iii)

Commuted Pension received by other employees who do not receive any gratuity

1/2 of full value of commuted pension will be exempt from tax

10A.

10(10A)(iii)

Commuted Pension received from a fund under clause (23AAB)

Fully Exempt

11.

10(19)

Family Pension received by the family members of Armed Forces

Fully Exempt

12.

57(iia)

Family pension received by family members in any other case

  •  33.33% of Family Pension subject to maximum of Rs. 15,000 In case of new tax regime under section 115BAC(1A)(ii)

  •  33.33% of Family Pension subject to maximum of Rs. 25,000

Voluntary Retirement

13.

10(10C)

Amount received on Voluntary Retirement or Voluntary Separation (Subject to certain conditions)

Least of the following is exempt from tax:

1) Actual amount received as per the guidelines i.e. least of the following

a) 3 months salary for each completed year of services

b) Salary at the time of retirement X No. of months of services left for retirement; or

2) Rs. 5,00,000

Provident Fund

14.

-

Employee’s Provident Fund

For taxability of contribution made to various employee’s provident fund and interest arising thereon see Note 3.

Any payment from the National Pension System Trust to an assessee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD, to the extent it does not exceed 60% of the total amount payable to him at the time of such closure or his opting out of the scheme.

Note: Partial withdrawal from NPS shall be exempt to the extent of 25% of amount of contributions made by the employee.

E.

Arrear of Salary and relief under section 89(1)

1.

15

Arrear of salary and advance salary

Taxable in the year of receipt. However relief under section 89 is available

2.

89

Relief under Section 89

If an individual receives any portion of his salary in arrears or in advance or receives profits in lieu of salary, he can claim relief as per provisions of section 89 read with rule 21A

3.

89A

Relief under 89A

Relief from taxation in income from retirement benefit account maintained in a notified country in accordance with Rule 21AAA.

F.

Other Benefits

1.

-

Lump-sum payment made gratuitously or by way of compensation or otherwise to widow or other legal heirs of an employee who dies while still in active service [Circular No. 573, dated 21-08-1990]

Fully exempt in the hands of widow or other legal heirs of employee

2.

-

Ex-gratia payment to a person (or legal heirs) by Central or State Government, Local Authority or Public Sector Undertaking consequent upon injury to the person or death of family member while on duty [Circular No. 776, dated 08-06-1999]

Fully exempt in the hands of individual or legal heirs

3.

-

Salary received from United Nation Organization [Circular No. 293, dated 10-02-1981]

Fully exempt

4.

10(6)(ii)

Salary received by foreign national as an officials of an embassy, high commission, legation, consulate or trade representation of a foreign state

Fully exempt if corresponding official in that foreign country enjoys a similar exemption

5.

10(6)(vi)

Remuneration received by non-resident foreign citizen as an employee of a foreign enterprise for services rendered in India, if:

 a)  Foreign enterprise is not engaged in any trade or business in India

 b)  His stay in India does not exceed in aggregate a period of 90 days in such previous year

 c)  Such remuneration is not liable to deducted from the income of employer chargeable under this Act

Fully exempt

6.

10(6)(viii)

Salary received by a non-resident foreign national for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year.

Fully exempt

7.

-

Salary and allowances received by a teacher /professor from SAARC member state (Subject to certain conditions).

Fully exempt

S. No.

Circumstances

Engine Capacity up to 1600 cc

Engine Capacity above 1600 cc

1

Motor Car is owned or hired by the employer

1.1

Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.

1.1-A

Used wholly and exclusively in the performance of official duties.

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

1.1-B

Used exclusively for the personal purposes of the employee or any member of his household.

Actual amount of expenditure incurred by the employer on the running and maintenance of motor car including remuneration paid by the employer to the chauffeur and increased by the amount representing normal wear and tear of the motor car at 10% per annum of the cost of vehicle less any amount charged from the employee for such use is taxable value of perquisite.

1.1-C

The motor car is used partly in the performance of duties and partly for personal purposes of the employee or any member of his household.

Rs. 1,800 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car) shall be taxable value of perquisite

Rs. 2,400 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car) shall be taxable value of perquisite

Nothing is deductible in respect of any amount recovered from the employee.

1.2

Where maintenances and running expenses are met by the employee.

1.2-A

Used wholly and exclusively in the performance of official duties.

Not a perquisite, hence, not taxable

Not a perquisite, hence, not taxable

1.2-B

Used exclusively for the personal purposes of the employee or any member of his household

Expenditure incurred by the employer (i.e. hire charges, if car is on rent or normal wear and tear at 10% of actual cost of the car, if car is owned by the employer) plus salary of chauffeur if paid or payable by the employer minus amount recovered from the employee.

1.2-C

The motor car is used partly in the performance of duties and partly for personal purposes of the employee or any member of his household

Rs. 600 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car) shall be taxable value of perquisite

Rs. 900 per month (plus Rs. 900 per month, if chauffeur is also provided to run the motor car) shall be taxable value of perquisite

Nothing is deductible in respect of any amount recovered from the employee.

2

Motor Car is owned by the employee

2.1

Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.

2.1-A

The reimbursement is for the use of the vehicle wholly and exclusively for official purposes

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

2.1-B

The reimbursement is for the use of the vehicle exclusively for the personal purposes of the employee or any member of his household (taxable in case of specified employee as well as non-specified employee)

Actual expenditure incurred by the employer minus amount recovered from the employee

2.1-C

The reimbursement is for the use of the vehicle partly for official purposes and partly for personal purposes of the employee or any member of his household.

Actual expenditure incurred by the employer minus Rs. 1800 per month and Rs. 900 per month if chauffer is also provided minus amount recovered from employee shall be taxable value of perquisite.

Actual expenditure incurred by the employer minus Rs. 2400 per month and Rs. 900 per month if chauffer is also provided minus amount recovered from employee shall be taxable value of perquisite.

3

Where the employee owns any other automotive conveyance and actual running and maintenance charges are met or reimbursed by the employer

3.1

Reimbursement for the use of the vehicle wholly and exclusively for official purposes;

Fully exempt subject to maintenance of specified documents

Fully exempt subject to maintenance of specified documents

3.2

Reimbursement for the use of vehicle partly for official purposes and partly for personal purposes of the employee.

Actual expenditure incurred by the employer as reduced by Rs. 900 per month

Not Applicable

Facility extended to

Value of perquisite

Provided in the school owned by the employer

Provided in any other school

Children

Cost of such education in similar school less Rs. 1,000 per month per child (irrespective of numbers of children) less amount recovered from employee

Amount incurred less amount recovered from employee (an exemption of Rs. 1,000 per month per child is allowed)

Other family member

Cost of such education in similar school less amount recovered from employee

Cost of such education incurred

Particulars

Taxable Value of Perquisites

Reimbursement of school fees of children or family member of employees

Fully taxable

Free educational facilities/ training of employees

Fully exempt

Particulars

Statutory provident fund

Recognized provident fund

Unrecognized provident fund

Public provident fund

Employers contribution to provident fund

Fully Exempt

Exempt only to the extent of 12% of salary*

Fully Exempt

-

Deduction under section 80C on employees contribution

Available

Available

Not Available

Available

Interest credited to provident fund
See Note

Fully Exempt

Exempt only to the extent rate of interest does not exceed 9.5%

Fully Exempt

Fully Exempt

Payment received at the time of retirement or termination of service

Fully Exempt

Fully Exempt (Subject to certain conditions and circumstances)

Fully Taxable (except employee’s contribution)

Fully Exempt

Particulars

Amount

Gross Annual Value

-

Less: Municipal Taxes

-

Net Annual Value

****

Less: Standard deduction at 30% [Section 24(a)]

-

Less: Interest on borrowed capital [Section 24(b)]

-

Income from house property

****

Description

Nature of Deductions

Municipal Taxes

Municipal taxes including service-taxes levied by any local authority in respect of house property is allowed as deduction, if:

a) Taxes are borne by the owner; and

b) Taxes are actually paid by him during the year.

Standard Deduction[Section 24(a)]

30% of net annual value of the house property is allowed as deduction if property is let-out during the previous year.

Interest on Borrowed Capital *

[Section 24(b)]

a) In respect of let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction shall be allowed as deduction

b) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of acquisition or construction of house property shall be allowed as deduction up to Rs. 2 lakhs. The deduction shall be allowed if capital is borrowed on or after 01-04-1999 and acquisition or construction of house property is completed within 5 years.

c) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property shall be allowed as deduction up to Rs. 30,000.

S. No.

Property Type

Gross Annual Value of the property

Deduction for municipal taxes

Net Annual Value of the property

Standard Deduction

Interest on borrowed capital

1.

Self-occupied house property/properties

Nil

Nil

Nil

Nil

Aggregate Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.

2.

House property cannot be actually occupied due to any reason

Nil

Nil

Nil

Nil

Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.

3.

Let out property

To be computed as per provisions of Section 23(1)

Allowed on actual payment basis

Gross annual value less Municipal taxes

30% of Net Annual Value

Entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments (Subject to certain conditions).

4.

More than two-self occupied properties

Only two properties selected by the taxpayer will be considered as self-occupied house properties and all other properties shall be deemed to be let-out for the purpose of computation of income under the head house property.

5.

Self-occupied property/properties let-out for the part of the year

The house will be taken as let-out property and no concession shall be available for the duration during which the property was self-occupied.

6.

One part of the property is let-out and other part is used for self-occupied purposes

Each part of the property shall be considered as separate property and income will be computed accordingly

S. No.

Section

Particulars

1.

28(i)

Profit and gains from any business or profession carried on by the assessee at any time during the previous year

2.

28(ii)

Any compensation or other payment due to or received by any specified person

3.

28(iii)

Income derived by a trade, professional or similar association from specific services performed for its members

4.

28(iiia)

Profit on sale of a license granted under the Imports (Control) Order 1955, made under the Import Export Control Act, 1947

5.

28(iiib)

Cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of Government of India

6.

28(iiic)

Any duty of Customs or Excise repaid or repayable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971.

7.

28(iiid)

Profit on transfer of Duty Entitlement Pass Book Scheme, under Section 5 of Foreign Trade (Development and Regulation) Act, 1992

8.

28(iiie)

Profit on transfer of Duty Free Replenishment Certificate, under Section 5 of Foreign Trade (Development and Regulation) Act 1992

9.

28(iv)

Value of any benefits or perquisites arising from a business or the exercise of a profession.

10.

28(v)

Interest, salary, bonus, commission or remuneration due to or received by a partner from partnership firm

11.

28(va)

 a) Any sum received or receivable for not carrying out any activity in relation to any business or profession; or

 b) Any sum received or receivable for not sharing any know-how, patent, copyright, trademark, licence, franchise, or any other business or commercial right or information or technique likely to assist in the manufacture of goods or provision of services.

12.

28(vi)

Any sum received under a Key man Insurance policy including the sum of bonus on such policy

13.

28(vii)

Any sum received ( or receivable) in cash or in kind, on account of any capital assets (other than land or goodwill or financial instrument) being demolished, destroyed, discarded or transferred, if the whole of the expenditure on such capital assets has been allowed as a deduction under section 35AD

14.

Explanation 2 to section 28

Income from speculative transactions. However, it shall be deemed to be distinct and separate from any other business.

15.

41(1)

• Remission or cessation of liability in respect of any loss, expenditure or trading liability incurred by the taxpayers

• Recovery of trading liability by successor which was allowed to the predecessor shall be chargeable to tax in the hands of successor. Succession could be due to amalgamation or demerger or succession of a firm succeeded by another firm or company, etc.

• Any liability which is unilaterally written off by the taxpayer from the books of accounts shall be deemed as remission or cessation of such liability and shall be chargeable to tax.

16.

41(2)

Depreciable asset in case of power generating units, is sold, discarded, demolished or destroyed, the amount by which sale consideration and/ or insurance compensation together with scrap value exceeds its WDV shall be chargeable to tax.

17.

41(3)

Where any capital asset used in scientific research is sold without having been used for other purposes and the sale proceeds together with the amount of deduction allowed under section 35 exceed the amount of the capital expenditure, such surplus or the amount of deduction allowed, whichever is less, is chargeable to tax as business income in the year in which the sale took place.

18.

41(4)

Where bad debts have been allowed as deduction under Section 36(1)(vii) in earlier years, any recovery of same shall be chargeable to tax.

19.

41(4A)

Amount withdrawn from special reserves created and maintained under Section 36(1)(viii) shall be chargeable as income in the previous year in which the amount is withdrawn.

20.

41(5)

Loss of a discontinued business or profession could be adjusted from the deemed business income as referred to in section 41(1), 41(3), (4) or (4A) without any time limit.

21.

43CA

Where consideration for transfer of land or building or both as stock-in-trade is less than the stamp duty value, the value so adopted shall be deemed to be the full value of consideration for the purpose of computing income under this head.

However, no such adjustment is required to be made if value adopted for stamp duty purposes does not exceed 110% of the sale consideration.
Note:
To boost the demand in the real-estate sector and to enable the real-estate developers to sell their unsold inventory at a lower rate, the safe harbour limit is increased from existing 10% to 20% in case of transfer of residential property during the period from 12-11-2020 to 30-06-2021 by way of the first-time allotment to any person. Further, the consideration received or accruing as a result of such transfer should not exceed Rs. 2 crores.

The profits and gains arising from construction contract or a contract for providing service is to be determined on the basis of percentage completion method, in accordance with the notified ICDS.

In case of contract for providing services with duration of not more than 90 days, the profits and gains shall be determined on basis of project completion method.

While as in case of contract for providing services with indeterminate number of acts over a specified period of time shall be determined on basis of straight line method.

23.

43D

In the case of following assessees, income by way of interest on the prescribed bad or doubtful debts is chargeable to tax in the year of receipt or in the year of credit of such income in the profit and loss account, whichever is earlier:

 (a) A public financial institution;

 (b) A scheduled bank;

 (c) A co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank;

 (d) A state financial corporation;

 (e) A state Industrial investment corporation;

 (f) Such class of non-banking financial companies as notified by Govt.

Assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Govt. or State Govt. or any authority or body or agency to the assessee would be included in definition of income as referred to in Section 2(24). However, in the following cases subsidy or grant shall not be treated as income:

 i)  The subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of Section 43;

 ii)  The subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be.

Section

Nature of expenditure

Quantum of deduction

Assessee

30

Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises

Actual expenditure incurred excluding capital expenditure

All assessee

31

Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture

Actual expenditure incurred excluding capital expenditure

All assessee

32(1)(i)

Depreciation on

i) buildings, machinery, plant or furniture, being tangible assets;

ii) know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession, being intangible assets

Allowed at prescribed percentage on Straight Line Method for each asset

Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than one hundred and eighty days in that previous year, the deduction in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset.

Assessees engaged in business of generation or generation and distribution of power

Note:

Taxpayers engaged in the business of generation or generation and distribution of power shall have the option to claim depreciation either on basis of straight line basis method or written down value method on each block of asset.

Depreciation on

i) buildings, machinery, plant or furniture, being tangible assets;

ii) know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature not being goodwill of business or profession, being intangible assets

Allowed at prescribed percentage on WDV method for each block of asset

Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than one hundred and eighty days in that previous year, the deduction in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset.

Additional depreciation on new plant and machinery (other than ships, aircraft, office appliances, second hand plant or machinery, etc.).

(subject to certain conditions)

Additional depreciation shall be available @20 % of the actual cost of new plant and machinery.

Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than one hundred and eighty days in that previous year, then deduction of additional depreciation would be restricted to 50% in the year of acquisition and balance 50% would be allowed in the next year

All assessee engaged in

- manufacture or production of any article or thing; or

- generation, transmission or distribution of power (if taxpayer is not claiming depreciation on basis of straight line method)

Additional depreciation on new plant and machinery (other than ships, aircraft,office appliances, second hand plant or machinery, etc.))

(Subject to certain conditions)

Additional depreciation shall be available @35 % of the actual cost of new plant and machinery.

Provided that where an asset is acquired by the assessee during the previous year and is put to use for a period of less than one hundred and eighty days in that previous year, then deduction of additional depreciation would be restricted to 50% of actual cost in the year of acquisition and balance 50% would be allowed in the next year

Note:

1. Manufacturing unit should be set-up on or after 1st day of April, 2015.

2. New plant and machinery acquired and installed during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020

32AC

Deduction under section 32AC is available if actual cost of new plant and machinery acquired and installed by a manufacturing company during the previous year exceeds Rs. 25/100 Crores, as the case may be.(Subject to certain conditions)

15% of actual cost of new asset

Company engaged in business or manufacturing or production of any article or thing

Investment allowance shall be available @15 % of the actual cost of new plant and machinery in the year of installation of new asset.

Note:-

1) New asset should be acquired and installed during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020.

2) Manufacturing unit should be set-up on or after 1st day of April, 2015.

3) Deduction shall be allowed under Section 32AD in addition to deduction available under Section 32AC if assessee fulfils the specified conditions

33AB

Amount deposited in Tea/Coffee/Rubber Development Account by assessee engaged in business of growing and manufacturing tea/Coffee/Rubber in India

Deduction shall be lower of following:

a) Amount deposited in account with National Bank for Agricultural and Rural Development (NABARD) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme; or

b) 40% of profits from such business before making any deduction under section 33AB and before adjusting any brought forward loss.

(Subject to certain conditions)

All assessee engaged in business of growing and manufacturing tea/Coffee/Rubber

33ABA

Amount deposited in Special Account with SBI/Site Restoration Account by assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India

Deduction shall be lower of following:

a) Amount deposited in Special Account with SBI/Site Restoration Account; or

b) 20% of profits from such business before making any deduction under section 33ABA and before adjusting any brought forward loss.

(Subject to certain conditions)

All assessee engaged in business of prospecting for, or extraction or production of, petroleum or natural gas or both in India

35(1)(i)

Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).

Entire amount incurred on scientific research is allowed as deduction.

Expenditure on scientific research within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority.

All assessee

35(1)(ii)

Contribution to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)

100% of sum paid to such association, university, college, or other institution is allowed as deduction.

All assessee

35(1)(iia)

Contribution to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)

100% of  sum paid to the company is allowed as deduction

All assessee

35(1)(iii)

Contribution to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)

100% of sum paid to such association, university, college, or other institution is allowed as deduction

All assessee

35(1)(iv) read with 35(2)

Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)

Entire capital expenditure incurred on scientific research is allowed as deduction.

Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.

Note:

i. Capital expenditure excludes land and any interest in land;

ii. No depreciation shall be allowed on such assets.

All assessee

35(2AA)

Payment to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction.

The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme.

100% of payment is allowed as deduction (Subject to certain conditions).

All assessee

35(2AB)

Any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).

Expenditure on scientific research in relation to Drug and Pharmaceuticals shall include expenses incurred on clinical trials, obtaining approvals from authorities and for filing an application for patent.

100% of expenditure so incurred shall be allowed as deduction.

Note:

i. Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfils conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed.

Company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things

Deduction will be available in equal installments starting from the year in which actual payment is made and ending in the year in which spectrum comes to an end.

Note:

If spectrum fee is actually paid before the commencement of business, the deduction will be available from the year in which business is commenced.

35ABB

Capital expenditure incurred for acquiring any license or right to operate telecommunication services shall be allowed as deduction over the term of the license.

Deduction would be allowed in equal installments starting from the year in which such payment has been made and ending in the year in which license comes to an end.

All assessee engaged in telecommunication services

35AC

Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (Subject to certain conditions).

Actual payment made to prescribed entities. However, a company can also claim deduction for expenditure incurred by it directly on eligible projects.

Note:-

No deduction in any A.Y. commencing on or after the 1st day of April, 2018

All assessee. However, deduction for direct expenditure is allowed only to a company

35AD

Deduction in respect of `expenditure on specified businesses, as under:

a) Setting up and operating a cold chain facility

b) Setting up and operating a warehousing facility for storage of agricultural produce

c) Building and operating, anywhere in India, a hospital with at least 100 beds for patients

d) Developing and building a housing project under a notified scheme for affordable housing

e) Production of fertilizer in India

(Subject to certain conditions)

150% of capital expenditure incurred for the purpose of business is allowed as deduction provided the specified business has commenced its operation on or after 01-04-2012.

100% of capital expenditure will be allowed to be deducted from the assessment year 2018-19 onwards

Note: If such specified businesses commence operations on or before 31-03-2012 but after prescribed dates, deduction shall be limited to 100% of capital expenditure.

Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed if it is incurred in cash.

All assessee

35AD

Deduction in respect of expenditure on specified businesses, as under:

a) Laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network;

b) Building and operating, anywhere in India, a hotel of two-star or above category;

c) Developing and building a housing project under a scheme for slum redevelopment or rehabilitation

d) Setting up and operating an inland container depot or a container freight station

e) Bee-keeping and production of honey and beeswax

f) Setting up and operating a warehousing facility for storage of sugar

g) Laying and operating a slurry pipeline for the transportation of iron ore

h) Setting up and operating a semi-conductor wafer fabrication manufacturing unit

 i)  Developing or maintaining and operating, or developing, maintaining and operating a new infrastructure facility

(Subject to certain conditions)

100% of capital expenditure incurred for the purpose of business is allowed as deduction provided specified businesses commence operations on or after the prescribed dates.

Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed if the payment for such expenditure is made otherwise than by an account payee cheque/draft or ECS or through prescribed electronic mode of payment.

All assessee

Note: Such deduction is available to Indian company in case of following business, namely;-

 i) Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network

ii)  Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility.

35CCA

Payment to following Funds are allowed as deduction:

a) National Fund for Rural Development; and

b) Notified National Urban Poverty Eradication Fund

Actual payment to specified funds

All assessee

35CCC

Expenditure (not being cost of land/building) incurred on notified agricultural extension project for the purpose of training, educating and guiding the farmers shall be allowed as deduction, provided the expenditure to be incurred is expected to be more than Rs. 25 lakhs (Subject to certain conditions).

100% of the expenditure (Subject to certain conditions)

All assessee

35CCD

Expenditure incurred by a company (not being expenditure in the nature of cost of any land or building) on any notified skill development project is allowed as deduction (Subject to certain conditions).

100% of the expenditure (Subject to certain conditions)

Note:

 (i) No deduction shall be allowed to a company engaged in manufacturing alcoholic spirits or tobacco products.

Company engaged in manufacturing of any article or providing specified services

35D

An Indian company can amortize certain preliminary expenses (up to maximum of 5% of cost of the project or capital employed, whichever is more) (Subject to certain conditions and nature of expenditures)

Qualifying preliminary expenditure is allowable in each of 5 successive years beginning with the previous year in which the extension of undertaking is completed or the new unit commences production or operation.

Indian Company

35D

Non-corporate taxpayers can amortize certain preliminary expenses (up to maximum of 5% of cost of the project) (Subject to certain conditions and nature of expenditures)

Qualifying preliminary expenditure is allowable in each of 5 successive years beginning with the previous year in which the extension of undertaking is completed or the new unit commences production or operation.

Resident Non-corporate assessees

35DD

Expenditure incurred after 31-3-1999 in respect of amalgamation or demerger can be amortized by an Indian Company

Expenditure is allowed as deduction in five equal installments in 5 previous years starting with the year in which amalgamation or demerger took place.

Indian Company

35DDA

Expenditure incurred under Voluntary Retirement Scheme is allowed as deduction.

Each payment under VRS is allowed as deduction in five equal installments in 5 previous years.

All assessee

35E

Qualifying expenditure incurred by resident persons on prospecting for the minerals or on the development of mine or other natural deposit of such minerals shall be allowed as deduction (Subject to certain conditions).

Eligible expenditure is allowed as deduction in ten equal installments in 10 previous years.

Resident persons

36(1)(i)

Insurance premium covering risk of damage or destruction of stocks/stores

Actual expenditure incurred

All assessee

36(1)(ia)

Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society

Actual expenditure incurred

All assessee

36(1)(ib)

Medical insurance premium paid by any mode other than cash, to insure employee’s health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA

Actual expenditure incurred

All assessee

36(1)(ii)

Bonus or commission paid to employees which would not have been payable as profit or dividend if it had not been paid as bonus or commission

Actual expenditure incurred

All assessee

36(1)(iii)

Interest on borrowed capital (Subject to certain conditions)

Interest paid in respect of capital borrowed for the purposes of the business or profession shall be allowed as deduction. However, if capital is borrowed for acquiring an asset, then interest for any period beginning from the date on which capital was borrowed till the date on which asset was first put to use, shall not be allowed as deduction.

All assessee

36(1)(iiia)

Discount on Zero Coupon Bonds (Subject to certain conditions)

Pro-rata amount of discount on zero coupon bonds shall be allowed as deduction over the life of such bond

Specified Assessee

36(1)(iv)

Employer’s contributions to recognized provident fund and approved superannuation fund [subject to certain limits and conditions]

Actual expenditure incurred

All assessee

36(1)(iva)

Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee.

Actual expenditure not exceeding 14% of the salary* of the employee

*Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits)+ turnover based commission

All assessee - Employer

36(1)(v)

Employer’s contribution towards approved gratuity fund created exclusively for the benefit of employees under an irrevocable trust shall be allowed as deduction (Subject to certain conditions).

Actual expenditure not exceeding 8.33% of salary of each employee

All assessee - Employer

36(1)(va)

Deposit of employee’s contributions in their respective provident fund or superannuation fund or any fund set up under Employees’ State Insurance Act, 1948

Actual amount received if credited to the employee’s account in relevant fund on or before due date specified under relevant Act

All assessee - Employer

36(1)(vi)

Allowance in respect of animals which have died or become permanently useless (Subject to certain conditions)

Actual cost of acquisition of such animals less realization on sale of carcasses of animals

All assessee

36(1)(vii)

Bad debts which have been written off as irrecoverable (Subject to certain conditions)

Actual bad debts which have been written off from books of accounts

Note:-

However, if amount of debt or part thereof has been taken into account in computing the income of assessee on basis of income computation and disclosure standards notified under Section 145(2) without recording the same in accounts then, such debt shall be allowed in the previous year in which such debt or part thereof becomes irrecoverable. It shall be deemed that such debt or part thereof has been written off as irrecoverable in the accounts.