Income Tax AY 2019-2020

List of benefits available to Salaried Persons

							[AY 2019-20]
S.	Section		Particulars				Benefits
N.
A.	Allowances
1.	10(13A)	House Rent		Allowance (Sec.			Least of the following is exempt:
		10(13A) & Rule 2A)					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					Rs. 3,200 per month granted to an employee,
		an employee to meet expenditure					who is blind or deaf and dumb or
		for the purpose of commuting					orthopedically handicapped with disability of
		between place of residence and					lower extremities
		place of duty
5.	Sec. 10(14)	Transport	Allowance		to	an	Amount of exemption shall be lower of
		employee	working		in	any	following:
		transport business to meet his					a) 70% of such allowance; or
		personal	expenditure during			his	b) Rs. 10,000 per month.
		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.
6.	10(14)	Conveyance Allowance			granted		Exempt to the extent of expenditure incurred
		to meet	the	expenditure		on

			conveyance		in	performance of
			duties of an office
7.		10(14)	Any Allowance granted to meet						Exempt to the extent of expenditure incurred
			the cost of travel on tour or on
			transfer
8.		10(14)	Daily Allowance to meet the						Exempt to the extent of expenditure incurred
			ordinary daily			charges incurred
			by an employee on account of
			absence from his normal place of
			duty
9.		10(14)	Helper/Assistant Allowance						Exempt to the extent of expenditure incurred
10.		10(14)	Research Allowance granted for						Exempt to the extent of expenditure incurred
			encouraging			the	academic
			research	and	other		professional
			pursuits
11.		10(14)	Uniform Allowance						Exempt to the extent of expenditure incurred
12.		10(7)	Foreign		allowances			or	Fully Exempt
			perquisites paid or allowed by
			Government to its employees (an
			Indian	citizen)		posted		outside
			India
13.		-	Allowances to Judges of High						Fully Exempt.
			Court/Supreme Court (Subject to
			certain conditions)
14.		10(45)	Following		allowances			and	Fully Exempt
			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
15.		-	Allowances paid by the UNO to						Fully Exempt
			its employees
16.		10(45)	Allowances			to		Retired	Exempt subject to maximum of Rs.14,000
			Chairman/Members				of	UPSC	per month for defraying services of an
			(Subject to certain conditions)						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						Amount exempt from tax varies from Rs. 300
			(Hilly Areas) (Subject to certain						per month to Rs. 7,000 per month.
			conditions and locations)

18.Sec. 10(14) Border area allowances, Remote Amount exempt from tax varies from Rs. 200 Locality allowance or Disturbed per month to Rs. 1,300 per month.

Area allowance or Difficult Area

Allowance

(Subject

to

certain

conditions and locations)

19.

Sec. 10(14)

Tribal

area

allowance given

in

Rs. 200 per month

(a) Madhya Pradesh (b) Tamil

Nadu (c) Uttar Pradesh (d)

Karnataka (e) Tripura (f) Assam

(g) West Bengal (h) Bihar (i)

Orissa

20.

Sec. 10(14)

Compensatory

Field

Area

Rs. 2,600 per month

Allowance. If this exemption is

taken,

employee

cannot

claim

any exemption in respect of

border area allowance (Subject to

certain conditions and locations)

21.

Sec. 10(14)

Compensatory

Modified

Area

Rs. 1,000 per month

Allowance. If this exemption is

taken,

employee

cannot

claim

any exemption in respect of

border area allowance (Subject to

certain conditions and locations)

22.

Sec. 10(14)

Counter

Insurgency

Allowance

Rs. 3,900 per month

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)

23.

Sec. 10(14)

Underground

Allowance

is

Up to Rs. 800 per month

granted to employees working in

uncongenial, unnatural climate in

underground mines

24.

Sec. 10(14)

High

Altitude

Allowance

is

a) Up to Rs. 1,060 per month (for altitude of

granted

to

armed

forces

9,000 to 15,000 feet)

operating in high altitude areas

b) Up to Rs. 1,600 per month (for altitude

(Subject

to

certain

conditions

above 15,000 feet)

and locations)

25.

Sec. 10(14)

Highly

active

field

area

Up to Rs. 4,200 per month

allowance granted to members of

armed forces (Subject to certain

conditions and locations)

26.

Sec. 10(14)

Island

Duty

Allowance

granted

Up to Rs. 3,250 per month

to members of armed forces in

Andaman

and

Nicobar

and

Lakshadweep group

of

Island

(Subject

to

certain

conditions

and locations)

B.

Perquisites

1.

17(2)(i)/(ii)

Rent

free

unfurnished

License Fees determined in accordance with

read with

accommodation

provided

to

rules framed by Government for allotment of

Rule 3(1)

Central

and State Government

houses shall be deemed to be the taxable

employees

value of perquisites.

2.

17(2)(i)/(ii)

Unfurnished

rent

free

Taxable value of perquisites

read with

accommodation

provided

to

A. If House Property is owned by the

Rule 3(1)

other employees

employer:

i. 15% of salary, if population of city where

accommodation is provided exceeds 25

lakhs as per 2001 census

ii. 10% of salary, if population of city

where accommodation is provided

exceeds 10 lakhs but does not exceed

25 lakhs as per 2001 census

iii. 7.5% 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 15% 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.

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)			Rent	free	furnished	Taxable value of perquisites
		read with			accommodation			a) Find out taxable value of perquisite
		Rule 3(1)						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)			A furnished accommodation in a			Taxable value of perquisites
		read with			Hotel			Value of perquisite shall be lower of
		Rule 3(1)						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.
	5.	17(2)(iv)			Any sum paid by employer in			Fully Taxable
					respect of any obligation of an
					employee
	5A.	17(2)(viii)			Motor Car / Other Conveyance			Taxable value of perquisites (See Note 1
		read	with	Rule				below)
		3(2)
	6.	17(2)(viii)			Services of a domestic servant			Taxable value of perquisite shall be salary
		read	with	Rule	including	sweeper,	gardener,	paid or payable by the employer for such
		3(3)			watchmen or personal attendant			services less any amount recovered from the
					(Taxable in case of specified			employee.
					employee only [See Note 4])
	7.	17(2)(viii)			Supply of gas, electricity or			Taxable value of perquisites:
					water for household purposes

		read	with	Rule		1. Manufacturing cost per unit incurred by
		3(4)					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)			Education Facilities	Taxable value of perquisites (See Note 2
		read	with	Rule		below)
		3(5)
	9.	17(2)(viii)			Transport facilities provided by	Value at which services are offered by the
		read	with	Rule	the employer engaged in carriage	employer to the public less amount recovered
		3(6)			of passenger or goods (except	from the employee shall be a taxable
					Airlines or Railways)	perquisite
					(Taxable in case of specified
					employee only [See Note 4])
	10.	17(2)(v)			Amount payable by the employer	Fully Taxable
					to effect an insurance on life of
					employee or to effect a contract
					for an annuity
	11.	17(2)(vi)		read	ESOP/ Sweat Equity Shares	Taxable value of perquisites
		with		Rule		Fair Market value of shares or securities on
		3(8)/3(9)				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.
	12.	17(2)(vii)			Employer’s contribution towards	Taxable in the hands of employee to the
					superannuation fund	extent such contribution exceed Rs.1,50,000
	13.	17(2)(viii)		read	Interest free loan or Loan at	Interest free loan or loan at concessional rate
		with Rule 3(7)(i)			concessional rate of interest	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

Facility of travelling, touring and

a) Perquisite value taxable in the hands of

with

Rule

3(7)

accommodation availed of by the

employee shall be expenditure incurred

(ii)

employee or any member of his

by the employer less amount recovered

household for any holiday

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

Free food

and

beverages

1) Fully Taxable: Free meals in excess of

with

Rule

3(7)

provided to the employee

Rs. 50 per meal less amount paid by

(iii)

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 Gift or Voucher or Coupon on				a) Gifts in cash or convertible into money
	with	Rule	3(7)	ceremonial	occasions	or	(like gift cheque) are fully taxable
	(iv)			otherwise	provided to	the	b) Gift in kind up to Rs.5,000 in aggregate
				employee			per annum would be exempt, beyond
							which it would be taxable.
17.	17(2)(viii)		read	Credit Card			a) Expenditure incurred by the employer in
	with Rule 3(7)(v)						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	Free Recreation/ Club Facilities			a) Expenditure incurred by the employer
	with	Rule	3(7)				towards annual or periodical fee etc.
	(vi)						(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 Use of movable assets of the				Taxable value of perquisites
	with	Rule	3(7) employer by the employee is a				a) Use of Laptops and Computers: Nil
	(vii)			taxable perquisite			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	Transfer of movable assets by an			Taxable value of perquisites
	with	Rule	3(7) employer to its employee				a) Computers, Laptop and Electronics
	(viii)						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

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

										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	Any other benefit or amenity						Taxable value of perquisite shall be
		with Rule	3(7)	extended		by	employer		to	computed on the basis of cost to the
		(ix)		employee						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						Fully exempt
				perquisites (not provided for by
				way	of	monetary		payments)
				given to employee
	23.	10(5)		Leave	Travel		Concession		or	The exemption shall be limited to fare for
				Assistance (LTC/LTA), extended						going anywhere in India along with family
				by an employer to an employee						twice in a block of four years:
				for going anywhere in India						i. Exemption limit where journey is
				along with his family*						performed by Air - Air fare of
				*Family		includes		spouse,		economy class in the National Carrier
				children		and		dependent		by the shortest route or the amount
				brother/sister/parents.				However,		spent, whichever is less
				family doesn’t include more than						ii. Exemption limit where journey is
				2 children of an Individual born						performed by Rail - Air-conditioned
				on or after 01-10-1998.						first class rail fare by the 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	Medical facilities in India	1) Expense incurred or reimbursed by the
		section 17(2)			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	Medical facilities outside India	Any expenditure incurred or reimbursed by
		section 17(2)			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 Rs.
					2,00,000.
	C.	Deduction from salary
	1.	16(ia)		Standard Deduction	Rs. 40,000 or the amount of salary,
					whichever is lower
	2.	16 (ii)		Entertainment Allowance	Least of the following is deductible :
				received by the Government	a) Rs 5,000
				employees (Fully taxable in case	b) 1/5th	of	salary		(excluding		any
				of other employees)
					allowance, benefits or other perquisite)
					c) Actual entertainment allowance received
	3.	16(iii)		Employment Tax/Professional	Amount actually		paid	during the		year	is

			Tax.			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			Fully Exempt
			leave at the time of retirement of
			Government employees
	2.	10(10AA)	Encashment of unutilized earned			Least of the following shall be exempt from
			leave at the time of retirement of			tax:
			other employees (not being a			a) Amount actually received
			Government employee)			b) Unutilized earned leave* X Average
						monthly salary
						c) 10 months Average Salary**
						d) Rs. 3,00,000
						*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		Least of the following shall be exempt from
			received by a workman under the			tax:
			Industrial	Dispute	Act,	a) an amount calculated as per section
			1947(Subject	to	certain	25F(b) of the Industrial Disputes Act,
			conditions).			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	Fully Exempt
			Government	Employees	(Other
			than employees of statutory
			corporations)

2.

10(10)(ii)

Death -cum-Retirement Gratuity

Least of following amount is exempt from

received

by

other

employees

tax:

who are covered under Gratuity

1. (*15/26) X Last drawn salary** X

Act,

1972

(other

than

completed year of service or part

Government employee) (Subject

thereof in excess of 6 months.

to certain conditions).

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

Least of following amount is exempt from

received

by

other

employees

tax:

who are not covered under

1. Half month’s Average Salary* X

Gratuity Act, 1972 (other than

Completed years of service

Government employee) (Subject

2. Rs. 10,00,000

to certain conditions).

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

Fully Exempt

Nation

Organization

by

the

employee of his family members

2.

10(10A)(i)

Commuted Pension received by

Fully Exempt

an

employee

Central

Government, State Government,

Local Authority Employees and

Statutory Corporation

3.

10(10A)(ii)

Commuted Pension received by

1/3 of full value of commuted pension will

other employees

who

also

be exempt from tax

receive gratuity

4.

10(10A)(iii)

Commuted Pension received by

1/2 of full value of commuted pension will

other employees who do not

be exempt from tax

receive any gratuity

5.

10(19)

Family Pension received by the

Fully Exempt

family

members

of

Armed

Forces

6.

57(iia)

Family

pension

received

by

33.33% of Family Pension subject to

family members in any other

maximum of Rs. 15,000 shall be exempt

case

from tax

e) Voluntary Retirement

1.

10(10C)

Amount

received

on

Voluntary

Least of the following is exempt from tax:

			Retirement			or	Voluntary			1) Actual amount received as per the
			Separation		(Subject to			certain		guidelines i.e. least of the following
			conditions)							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)
	1.	10(12A)/10(12B)	National Pension System							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 40% 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							Taxable in the year of receipt. However relief
			salary							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
	F.	Other Benefits
	1.	-	Lump-sum			payment		made		Fully Exempt in the hands of widow or other
			gratuitously or by way of							legal heirs of employee
			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]
	2.	-	Ex-gratia payment to a person							Fully Exempt in the hands of individual or
			(or legal heirs) by Central or							legal heirs
			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]
	3.	-	Salary	received			from	United		Fully Exempt

			Nation	Organization			[Circular
			No. 293, dated 10-02-1981]
	4.	10(6)(ii)	Salary	received		by	foreign		Fully Exempt if corresponding official in that
			national	as an officials of an					foreign country enjoys a similar exemption
			embassy,	high		commission,
			legation,	consulate or				trade
			representation of a foreign state
	5.	10(6)(vi)	Remuneration received by					non-	Fully exempt
			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
	6.	10(6)(viii)	Salary received by a non-resident						Fully exempt
			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.
	7.	-	Salary and allowances				received		Fully Exempt
			by a teacher /professor from
			SAARC	member		state	(Subject
			to certain conditions).
	Notes:

1.Motor Car (taxable only in case of specified employees [See note 4]) except when car owned by the employee is used by him or members of his household wholly for personal purposes and for which reimbursement is made by the employer)

S.	Circumstances			Engine Capacity upto 1600 cc			Engine Capacity above 1600
No.				(value of perquisite )			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			Fully exempt		subject to	Fully exempt		subject to
	exclusively	in	the	maintenance	of	specified	maintenance	of	specified
	performance	of	official	documents			documents
	duties.
1.1-B	If car is used exclusively for			Actual amount of expenditure incurred by the employer on the
	the personal purposes of the			running and maintenance of motor car including remuneration
	employee or any member of			paid by the employer to the chauffeur and increased by the
	his household.			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

Rs. 1,800 per month (plus Rs.

Rs. 2,400 per month (plus Rs.

in the performance of duties

900 per month, if chauffeur is

900 per month, if chauffeur is

and

partly

for

personal

also provided to run the motor

also provided to run the motor

purposes of the employee or

car)

car)

any

member

of

his

Nothing is deductible in respect of any amount recovered from

household.

the employee.

1.2

Where maintenances and running expenses are met by the employee.

1.2-A

If car is used wholly and

Not a perquisite, hence, not

Not a perquisite, hence, not

exclusively

in

the

taxable

taxable

performance

of

official

duties.

1.2-B

If car is used exclusively for

Expenditure incurred by the employer (i.e. hire charges, if car is

the personal purposes of the

on rent or normal wear and tear at 10% of actual cost of the car)

employee or any member of

plus salary of chauffeur if paid or payable by the employer minus

his household

amount recovered from the employee.

1.2-C

The motor car is used partly

Rs. 600 per month (plus Rs. 900

Rs. 900 per month (plus Rs. 900

in the performance of duties

per month, if chauffeur is also

per month, if chauffeur is also

and

partly

for

personal

provided to run the motor car)

provided to run the motor car)

purposes of the employee or

Nothing is deductible in respect of any amount recovered from

any member of his household

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

Fully

exempt

subject

to

Fully

exempt

subject

to

use of the vehicle wholly and

maintenance

of

specified

maintenance

of

specified

exclusively

for

official

documents

documents

purposes

2.1-B

The reimbursement is for the

Actual expenditure incurred by the employer minus amount

use of the vehicle exclusively

recovered from the employee

for the personal purposes of

the employee or any member

of his household

2.1-C

The reimbursement is for the

Actual expenditure incurred by

Actual expenditure incurred by

use of the vehicle partly for

the employer minus Rs. 1800

the employer minus Rs. 2400

official purposes and partly

per month and Rs. 900 per

per month and Rs. 900 per

for personal purposes of the

month if chauffer is also

month if chauffer is also

employee or any member of

provided

minus

amount

provided

minus

amount

his household.

recovered from employee.

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

Fully

exempt

subject

to

Fully

exempt

subject

to

of the vehicle wholly and

maintenance

of

specified

maintenance

of

specified

exclusively

for

official

documents

documents

purposes;

3.2

Reimbursement for

the

use

Actual expenditure incurred by

Not Applicable

				of vehicle partly for official				the employer minus Rs. 900 per
				purposes	and partly	for		month minus amount recovered
				personal	purposes of	the		from employee
				employee.

2. Educational Facilities

Taxable only in the hands of specified employees [See note 4]

Facility		Value of perquisite
extended
to		Provided in the school owned by the employer	Provided in any other school
Children		Cost of such education in similar school less Rs.	Amount		incurred	less	amount
		1,000 per month per child (irrespective of numbers	recovered		from	employee		(an
		of children) less amount recovered from employee	exemption of Rs. 1,000 per month per
			child is allowed)
Other		Cost of such education in similar school less	Cost of such education incurred
family		amount recovered from employee
member
2.1 Other Educational Facilities
Particulars					Taxable	Value		of
					Perquisites
Reimbursement of school fees of children or family member of				Fully taxable
employees
Free educational facilities/ training of employees					Fully exempt

3. Employees Provident Fund

Tax treatment in respect of contributions made to and payment from various provident funds are summarized in the table given below:

Particulars			Statutory	Recognized	provident	Unrecognized		Public
			provident	fund		provident fund		provident
			fund					fund
Employers		contribution to	Fully	Exempt only to the extent		Fully Exempt		-
provident fund			Exempt	of 12% of salary*
Deduction		under section	Available	Available		Not Available		Available
80C	on	employees
contribution
Interest credited to provident			Fully	Exempt only to the extent		Fully Exempt		Fully
fund			Exempt	rate of interest does not				Exempt
				exceed 9.5%
Payment received at the time			Fully	Fully Exempt	(Subject to	Fully	Taxable	Fully
of retirement or termination			Exempt	certain conditions and		(except	employee’s	Exempt
of service				circumstances)		contribution)

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

Payment from recognized provident fund shall be exempt in the hands of employees in following circumstances:

a)If employee has rendered continue service with his employer (including previous employer, when PF account is transferred to current employer) for a period of 5 years or more

b)If employee has been terminated because of certain reasons which are beyond his control (ill health, discontinuation of business of employer, etc.)

4.Specified Employee

The following employees are deemed as specified employees:

1)A director-employee

2)An employee who has substantial interest (i.e. beneficial owner of equity shares carrying 20% or more voting power) in the employer-company

3)An employee whose monetary income* under the salary exceeds Rs. 50,000

*Monetary Income means Income chargeable under the salary but excluding perquisite value of all non- monetary perquisites

[As amended by Finance Act, 2018]