Income Tax : Table of benefits available to Salaried Persons for Assessment Year 2018-19 (F.Y. 2017-18)

Income Tax : Table of benefits available to Salaried Persons for Assessment Year 2018-19 (F.Y. 2017-18)

Income Tax : Table of benefits available to Salaried Persons for Assessment Year 2018-19 (F.Y. 2017-18)

INCOME TAX



Table of benefits available to Salaried Persons


[AY 2018-19]
 
itax-table-of-benefits-for-salaried-persons-for-ay-2018-19

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) Orissa
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. 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)
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.
5.
17(2)(iv)
Any sum paid by employer in respect of any obligation of an
employee
Fully Taxable
5A.
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.
12.
17(2)(vii)
Employer’s contribution towards superannuation fund
Taxable in the hands of employee to the extent such
contribution exceed Rs.1,50,000
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 lessamount
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
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 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. 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 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. 10,00,000
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
33.33% of Family Pension subject to maximum of Rs. 15,000
shall be exempt from tax
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)
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 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
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

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)
Read also :  CBDT Order u/s 119 of the IT Act, 1961 on issue of certificates for lower rates/nil deduction/collection of TDS or TCS
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 minusamount recovered from employee.
Actual expenditure incurred by the employer minus Rs.
2400 per month and Rs. 900 per month if chauffer is also
provided minusamount 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



2. Educational Facilities

Taxable only in the hands of specified employees [See note 4]
Read also :  Budget 2017-18 - No tax up to Rs. 3 lakh and 5% up to Rs. 5 lakh in F.Y. 2017-18
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

2.1 Other Educational Facilities
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

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:
Read also :  Exemption from Income Tax - Service Element and Disability Element of disability pension granted to disabled personnel of Armed Forces - reg.
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

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

* 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]

to view pdf click here
[facebook login required]

https://feedburner.google.com/fb/a/mailverify?uri=blogspot/jFRICS&loc=en_US

FOLLOW US FOR LATEST UPDATES ON 

http://https://www.facebook.com/stafftoday

AND 

http://www.twitter.com/govempnews/


COMMENTS