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lncome lrom Salary ..................................................................Error! Bookmark not defined.
lncome lrom Pouse ÞroperLy ................................................................................................... 4
lncome lrom 8uslness of Þrofesslon .......................................................................................... 7
lncome lrom CaplLal Calns ....................................................................................................... 8
CrLher Sources lncome .......................................................................................................... 10
ueducLlons ........................................................................................................................... 11
8eLlremenL 8eneflLs .............................................................................................................. 12
8ebaLes ................................................................................................................................ 19
ÞerqulslLes ........................................................................................................................... 20
Salary SLrucLure .................................................................................................................... 22
SecLlon 10 ............................................................................................................................ 24
lorm 16 ............................................................................................................................... 28












Income from Salary
Important Conceptsť
O lncome under Lhe head salarles covers all posslble remuneraLlon due/pald Lo a person ln
respecL of servlces rendered by hlm ln an express or lmplled conLracL of employmenL
O ÞaymenL recelved by an lndlvldual oLher Lhan an employer cannoL be Lermed as salary and
consequenLly cannoL be Laxed under Lhls head
O Salary ls Laxed on due basls or recelpL basls whlchever ls earller
O lf Lhe employer pays Lhe salary Lax free Lhe employee has Lo lnclude ln hls Laxable lncome
noL only Lhe salary buL also Lhe amounL of Lax pald by Lhe employer
a|ary |nc|udes the fo||ow|ng |temsť
O Jages
O ny annulLy or penslon
O ny graLulLy
O ny feesţ commlsslonţ perqulslLe or proflLs ln lleu of or ln addlLlon Lo any salary or wages
O ny advance salary
O ny paymenL recelved for any leave noL avalled by hlm
O @ransferred balance ln a 8Þl Lo Lhe exLenL lL ls Laxable
lormaL of CompuLaLlon of @axable SalaryŦ
1 8aslc Salary pŦm
2 uearness llowance pŦm
3 Commlsslon
4 dvance Salary
3 rrears of Salary
lully @axable llowances
1 ClLy CompensaLory llowance
2 lees
3 8onus
4 Lunch/@lffln llowance
3 CverLlme llowance
6 ServanL llowance
7 Jarden llowance
8 lamlly llowance
9 Medlcal llowance
10 Plll llowance
ÞarLly @axable llowances
1 Pouse 8esL llowance
2 Chlldren LducaLlon llowance
3 Chlldren PosLel llowance
4 @ransporL llowance
3 @ravelllng llowance
6 Conveyance llowance
7 Pelper llowance
8 cademlc llowance
9 unlform llowance
10 LnLerLalnmenL llowance
CLher paymenLs recelved
1 CraLulLy
2 uncommuLed Þenslon (Laken perlodlcally)
3 CommuLaLlon of Þenslon
4 8eLrenchmenL CompensaLlon
3 Leave encashmenL durlng servlce
6 Leave encashmenL upon reLlremenL
7 volunLary reLlremenL compensaLlon
8 Leave Lravel concesslon
9 Lmployerƌs conLrlbuLlon Lo 8Þl
10 lnLeresL on 8Þl recelved
ÞerqulslLes
1
Servlce of Sweeperţ Cardenerţ JaLchman
eLcŦ
2
Supply of JaLerţ Casţ LlecLrlclLy for
household purposes
3
LducaLlonal faclllLles Lo Lhe members of
household of employee
4 @ransporLaLlon of Coods/Þassengers
3 Pouslng/vehlcle Loan (noL for repalrs)
6 @oLal Salary
7 (Less) Þrofesslonal Lax
@axable Salary

B Income from House Property
@ax ls on Lhe annual value of Lhe house properLy afLer allowlng cerLaln deducLlonsŦ Pouse ÞroperLy
conslsLs of any bulldlngţ flaLţ shop eLcŦţ and Lhe land aLLached Lo Lhe bulldlngŦ
CompuLaLlon of lncome from Self Cccupled properLy
lncome ls compuLed afLer glvlng cerLaln deducLlons from Lhe annual value of Lhe properLyŦ
% Computat|on of annua| va|ue of se|fŴoccup|ed property
@he annual value of Self occupled properLy ls Laken as nlL lf Lhe properLy ls fully uLlllzed for own
resldenLlal sLay durlng Lhe year or lf Lhe properLy ls noL acLually occupled as owner and ls also noL leL
ouLŦ lf a properLy ls leL ouL for only a parL of Lhe yearţ proporLlonaLe annual value wlll be calculaLedŦ
8% Lnt|t|ed deduct|ons for se|fŴoccup|ed property
@he only enLlLled deducLlon ls lnLeresLţ lf any payableţ on loan Laken for Lhe purchase or consLrucLlon
of Lhe house properLyŦ @he maxlmum deducLlon on Lhls accounL ls 8sŦ30ţ000/ŴŤ Poweverţ for
properLles acqulred or consLrucLed beLween Lhe 1sL prll 1999 and Lhe 1sL prll 2003 ouL of
borrowed fundsţ maxlmum llmlL ls 8sŦ 1ţ30ţ000/Ŵ

CompuLaLlon of lncome from leL ouL properLy
lncome ls compuLed afLer glvlng cerLaln deducLlons from Lhe neL annual value of Lhe leL ouL
properLyŦ
% Computat|on of net va|ue of |et out property
lor leL ouL properLles Lhe gross annual value wlll be Lhe greaLer of Lhe followlng Lhree amounLsť
O Munlclpal value of Lhe properLyŤ
O cLual renL recelved durlng Lhe yearŤ
O lalr renL lŦeŦ renL of slmllar properLles ln Lhe same or slmllar locallLyŦ
CuL of Lhe gross annual valueţ munlclpal Laxes acLually pald durlng Lhe year has Lo be deducLed Lo
arrlve aL Lhe neL annual valueŦ
8% Lnt|t|ed deduct|ons for |et out property
@he deducLlons avallable for compuLlng Pouse ÞroperLy lncome areť
O 30Ʒ of Lhe neL annual value for repalr and malnLenance and renL collecLlon expenses for Lhe
properLy
O lnLeresL on money borrowed Lo bulldţ buy or repalr Lhe properLyŤ
wnersh|p of property
8esldes ownlng properLy ln own nameţ a person ls deemed as owner ln followlng Lhree casesť
O s Lransferor of Lhe properLy Lo spouse or mlnor chlld for lnadequaLe or no conslderaLlonŤ
O s holder of an lmparLlble esLaLe or a properLy ln parL performance of a conLracL under Lhe
@ransfer of ÞroperLy cLŤ
O s shareholder of a coŴoperaLlve socleLy or a companyţ whlch enLlLles Lo hold any properLy
undamenta| cond|t|ons for tax|ng |ncome under th|s headť
O @he properLy should conslsL of any bulldlngs or landsŦ
O @he assessee should be Lhe owner of Lhe properLyŦ
O @he properLy should noL be used by Lhe owner for Lhe purpose of carrylng on any buslness
or professlon Lhe proflLs of whlch are chargeable Lo LaxŦ
ormat for computat|on of nouse property |ncomeť
Cross annual value
(Ŵ) Munlclpal Laxes
nL@ nnuL vLuL
(Ŵ) 8epalrs
(Ŵ) lnLeresL
@O8LL nnuL vLuLŦ

Computat|on of Gk --D VDL (GV%ť
O tep 1ť Select higher of fair rent or municipal rent.
O tep 2ť Select higher of standard rent or amount derived in Step 1.
O tep 3ť Select higher of actual rent received/receivable or amount derived in Step 2.
However it should be noted that GAV for self-occupied property & let out vacant house
should be taken as NIL.
Municipal taxes paid by the owner would be deductible.
30% of Net Annual Value will be the standard deduction for repairs. Full amount of interest on
housing loan paid would be deductible. For self-occupied property, interest would be deductible
only to the extent of Rs. 1.50 lakhs only.







C Income from Business of Profession
ormat for computat|on of bus|ness |ncomeť
ÞroflL as per ÞroflL Ǝ Loss a/c
(less) oLher admlsslble expenses
(add) lnadmlsslble expenses
@axable buslness or professlonal lncome
@he fo||ow|ng types of |ncome are chargeab|e to tax under the head 8us|ness of Þrofess|onť
O ÞroflLs and galns from any buslness of professlon
O lncome derlved from any Lrade or professlon
O ny salaryţ lnLeresLţ bonus recelved by a parLner of a flrm from such a flrm
O Sum recelved under key Man lnsurance pollcy
O lncome from a speculaLlve LransacLlon
O value of any beneflL or any perqulslLe wheLher converLlble lnLo money or noL arlslng from
buslness or Lhe exerclse of a professlon
8as|c pr|nc|p|es govern|ng the adm|ss|b|||ty of deduct|ons under Income from 8us|ness of
Þrofess|onť
O Cnus Lo prove Lhe admlsslblllLy of Lhe expendlLure should lle on Lhe assesse
O llowances are cumulaLlve
O LxpendlLure should relaLe Lo Lhe prevlous year
O 8uslness should be carrled on ln Lhe prevlous year
O LxpendlLure should have been lncurred ln relaLlon Lo Lhe assesseeƌs own buslness
O 8eneflL of expendlLure may exLend beyond Lhe prevlous year
-o a||owance |n respect of a nonŴex|stent ||ab|||tyť
O LxpendlLure LalnLed wlLh lllegallLy cannoL be allowed as a deducLlon
O no allowance ln respecL of anLlclpaLed lossesŦ nLlclpaLed loss cannoL be deducLed even
Lhough Lhe loss ls cerLalnŦ ln oLher words loss whlch ls nelLher suffered noL lncurred durlng
Lhe prevlous year ls noL deducLlbleŦ
O no deducLlon ln respecL of depreclaLlon of lnvesLmenL lŦeŦ deducLlon ln respecL of
depreclaLlon of lnvesLmenL ln shares and oLher securlLles ls noL avallableŦ

educt|ons express|y a||owedť
O 8enLţ raLesţ Laxesţ repalrs and lnsurance of bulldlng
O uepreclaLlon
O ueducLlon ls posslble under @ea uevelopmenL accounL
O ueducLlon posslble under lnvesLmenL deposlL scheme
O SlLe resLoraLlon fund
O 8eserve for shlpplng buslness
O 8evenue expendlLure lncurred by an assessee who carrles on sclenLlflc buslness
O ueducLlon ln respecL of paLenLs and copyrlghLs
O ueducLlon ln respecL of expendlLure of know how

Income from Capital Cains
Cap|ta| Ga|ns
lf any CaplLal sseL ls sold or Lransferredţ Lhe proflLs arlslng ouL of such sale are Laxable as caplLal
galns ln Lhe year ln whlch Lhe Lransfer Lakes placeŦ
ef|n|t|on of cap|ta| asset
CaplLal sseL means all moveable or lmmovable properLy excepL Lradlng goodsţ personal effecLsţ
agrlculLural land oLher Lhan wlLhln munlclpal areas or wlLhln 8 kllomeLers from lL wherever noLlfled
and gold bondsŦ !ewelry and ornamenL are noL personal effecLs and Lhelr sale wlll aLLracL caplLal
galnsŦ
|st|nct|on between short term and |ongŴterm asset
CaplLal sseLs are of Lwo Lypes lŦeŦţ long Lerm and shorL LermŦ LongŴLerm caplLal asseLs are asseLs
held for more Lhan 36 monLhs before Lhey are sold or LransferredŦ ln case of sharesţ debenLures and
muLual fund unlLs Lhe perlod of holdlng requlred ls only 12 monLhsŦ ulfferenL raLes of Lax apply for
galns on Lransfer of Lhe long Lerm and shorLŴLerm caplLal asseLsŦ Calns on shorLŴLerm caplLal asseL
are Laxed as regular lncomeŦ
Computat|on of Cap|ta| Ga|ns
CaplLal galns are Lo be compuLed by deducLlng Lhe followlng Lhree amounLs from Lhe conslderaLlon
money recelved on Lransfer of Lhe asseLŦ
l) @he acLual cosL of Lhe asseL or lLs esLlmaLed markeL value as on 1Ŧ4Ŧ81ţ lf acqulred earllerŤ
ll) @he cosL of lmprovemenLţ lf anyţ for Lhe asseLŤ
lll) Lxpenses lncurred on Lransfer of Lhe asseLŤ and
ln case of a longŴLerm caplLal asseLţ Lhe cosLs are lncreased as per a CosL lnflaLlon lndex for Lhe yearŦ
Lxempt|ons from Cap|ta| Ga|ns
ln case of lndlvlduals and Pulţ longŴLerm caplLal galns are exempL lf Lhe sale proceeds are relnvesLed
ln cerLaln asseLsŦ
Some examplesť
) ÞroflLs on sale of resldenLlal house ls relnvesLed ln a new resldenLlal houseŦ
8) Long Lerm caplLal galns are lnvesLed ln noLlfled bonds
@hese exempLlons are sub[ecL Lo cerLaln condlLlons and Lhe relnvesLmenL has Lo be made wlLhln Lhe
prescrlbed LlmeŦ
ormat for computat|on of Cap|ta| ga|nsť
ConslderaLlon recelved on sale
(less) Lxpenses lncurred ln relaLlon Lo sale
nL@ CCnSluL8@lCn
(less) CosL / lndexed cosL of acqulslLlon
Long Lerm / ShorL Lerm caplLal galn
(less) LxempLlon u/s 34 of Lhe lŦ@ acL
@O8LL LCnC / SPC8@ @L8M CÞl@L
Cln / LCSS

Utber Sources Income
ny lncome oLher Lhan (a) salaryţ (b) house properLy lncome (c) lncome from buslness or professlonţ
or (d) CaplLal Calns lncomeţ wlll be Laxed as lncome from CLher SourcesŦ Lxamples are lnLeresL from
deposlLsţ wlnnlngs from loLLerlesţ racesţ lncome from Lhe hlrlng ouL of machlneryţ or machlnery
composlLely wlLh bulldlngţ royalLyţ copyrlghL feesţ famlly penslonţ dlvldends oLher Lhan from
domesLlc companles and muLual funds eLcŦ
||owab|e educt|ons
O ln case of wlnnlngs from loLLerles and races no deducLlon ls allowableŦ
O lor famlly penslonţ Lhe allowable deducLlon ls 1/3rd of Lhe penslon or 8sŦ 13ţ000/Ŵ
whlchever ls lowerŦ
O lor oLher casesţ any revenue expendlLureţ excluslvely lncurred for earnlng such lncome ls
allowed as deducLlonŦ
O ln case of lncome from hlrlng of machlneryţ depreclaLlon on such machlnery ls also allowable
as deducLlonŦ

( + 8 + C + u + L) ƹ Cross LoLal lncome






eductions
eduction is the amount, which is reduced from the gross total income before computing tax.
There are other deductions such as for donations, for repayment of loans taken for educational
purposes etc.
eductions from Salary income
Certain deductions are available while determining the taxable salary income.
A) Standard Deduction
Income @ax |abs 2009]2010 for Men
lncomeť upLo 1Ŧ6 lacs nC @O
lncome ť 1Ŧ6 lacs Lo 3 lacs 10 Ʒ
lncome ť 3 lacs Lo 3 lacs 20 Ʒ
lncome ť above 3 lacs 30 Ʒ

Income @ax |abs 2009]2010 or Women
lncome ť upLo 1Ŧ9 lacs nC @O
lncome ť 1Ŧ9 lacs Lo 3 lacs 10 Ʒ
lncome ť 3 lacs Lo 3 lacs 20 Ʒ
lncome ť above 3 lacs 30 Ʒ

Income @ax s|abs 2009]2010 for en|or C|t|zen
lncome ť upLo 2Ŧ4 lacs nC @O
lncome ť 2Ŧ4 lacs Lo 3 lacs 10 Ʒ
lncome ť 3 lacs Lo 3 lacs 20 Ʒ
lncome ť above 3 lacs 30 Ʒ

B) Professional Tax
!rofessional tax, which is paid, is allowed as deduction.

C) Arrears salary
If salary is received in arrears or in advance, it can be spread over the years to which it relates
and be taxed accordingly as per section 89(1) of the Income tax Act.


etirement Benefits
@hese beneflLs are provlded by Lhe employer Lo Lhe employee for hls fuLureţ elLher whlle ln servlce
or on hls reLlremenLŦ @hese have dlfferenL Lax LreaLmenLŦ @hey lncludeť
a% Þens|on
Þenslon ls a paymenL made by Lhe employer afLer Lhe reLlremenL or deaLh of employee as a reward
for pasL servlceŦ lL ls normally pald as a perlodlcal paymenL on monLhly basls buL cerLaln employers
may allow an employee Lo forgo a porLlon of penslon ln lleu of lumpsum amounLŦ @hls ls known as
commuLaLlon of penslonŦ @he LreaLmenL of Lhese Lwo klnds of penslon ls as underť
(|% Þer|od|ca| pens|on (or uncommuted pens|on%Ŧ
lL ls fully Laxable ln Lhe hands of all employeeţ whereas governmenL or nongovernmenLŦ
(||% Commuted pens|on
lor employees of governmenL organlsaLlonsţ local auLhorlLles and sLaLuLory corporaLlonsţ lL ls fully
exempLed from Laxţ hence noL lncluded ln gross salaryŦ
lor oLher employeesţ commuLed value of half of Lhe LoLal value of penslon ls exempLed from LaxŦ
ny amounL recelved over and above Lhls amounL ls Laxableţ so lncluded ln gross salaryŦ
lfţ howeverţ Lhe employee ls also recelvlng graLulLy (anoLher reLlremenL beneflL) along wlLh penslonţ
Lhen one Lhlrd of Lhe LoLal value of penslon ls exempLed from LaxŦ mounL recelved ln excess of Lhls
ls Laxableţ so lncluded ln gross salaryŦ
b% Gratu|ty
CraLulLy ls Lhe paymenL made by Lhe employer Lo an employee ln appreclaLlon of pasL servlces
rendered by Lhe employeeŦ lL ls recelved by Lhe employee on hls reLlremenLŦ CraLulLy ls exempLed
upLo cerLaln llmlL dependlng upon Lhe caLegory of employeeŦ lor Lhe purpose of exempLlonţ
employees are dlvlded lnLo 3 caLegorlesť
(|% Government emp|oyees and emp|oyees of |oca| author|tyť
ln case of such employeesţ Lhe enLlre amounL of graLulLy recelved by Lhen ls exempLed from LaxŦ
noLhlng wlll be added Lo gross salaryŦ
(||% Lmp|oyees covered under Þayment of Gratu|ty ctţ 1972Ŧ SS
ln case of employees who are covered under ÞaymenL of CraLulLy cLţ Lhe mlnlmum of Lhe followlng
amounLs are exempLed from Laxť
- mounL of graLulLy acLually recelved
- 13 days of salary for every compleLed years of servlce or parL Lhereof ln excess of slx monLhsŦ (13 /
26 x żbaslc salary + uearness llowanceŽ x noŦ of years of servlce+1 żlf fracLlon ƽ 6 monLhsŽ)Ŧ
- 8sŦ3ţ 30ţ000 (amounL speclfled by governmenL)Ŧ
(|||% ther emp|oyeesŦ
ln case of employees noL falllng ln Lhe above Lwo caLegorlesţ graLulLy recelved from Lhe employers ls
exempL Lo Lhe exLenL of mlnlmum of followlng amounLsť
- cLual amounL of graLulLy recelvedŦ
- Palf monLh average salary for every compleLed year of servlce
(1/2 x average salary of lasL 10 monLhs x compleLed years of servlce)Ŧ
- 8sŦ3ţ 30ţ000 (amounL speclfled by governmenL)Ŧ
c% eave a|ary
Lmployees are enLlLled Lo varlous Lypes of leaveŦ @he leave generally can be Laken (casual
leave/medlcal leave) or lL lapsesŦ Larned leave ls a klnd of leave whlch an employee ls sald Lo have
earned every year afLer worklng for some LlmeŦ @hls leave can elLher be avalled every yearţ or geL
encashmenL for lLŦ lf leave ls noL avalled or encashedţ lL ls allowed Lo be carrled forwardŦ @hls leave
keeps geLLlng accumulaLed and ls encashed by employee on hls reLlremenLŦ @he Lax LreaLmenL of
leave encashmenL ls as underť
(l) LncashmenL of leave whlle ln servlceŦ @hls ls fully Laxable and so ls added Lo gross salaryŦ
(ll) LncashmenL of leave on reLlremenLŦ lor Lhe purpose of exempLlon of accumulaLed leave
encashmenLţ Lhe employees are dlvlded lnLo Lwo caLegorlesť
% tate or Centra| Government emp|oyeesŦ
Leave encashmenL recelved by governmenL employees ls fully exempLed from LaxŦ noLhlng ls Lo be
lncluded ln gross salaryŦ
% ther emp|oyees
Leave encashmenL of accumulaLed leave aL Lhe Llme of reLlremenL recelved by oLher employees ls
exempLed Lo Lhe exLenL of mlnlmum of four amounLsŦ
Ŵ mounL speclfled by CenLral CovernmenL (3ţ 00ţ000)Ŧ
Ŵ Leave encashmenL acLually recelvedŦ
Ŵ 10 monLhs average salary (10 x average salary of 10 monLhs preceedlng reLlremenL)Ŧ
Cash equlvalenL of unavalled leaveŦ
O (Leave enLlLlemenL ls calculaLed on Lhe basls of maxlmum 30 days leave every yearţ cash
equlvalenL ls based on average salary of lasL 10 monLhs)Ŧ
d% Þrov|dent und
ÞrovldenL lund Scheme ls a welfare scheme for Lhe beneflL of employeesŦ under Lhls schemeţ
cerLaln amounL ls deducLed by Lhe employer from Lhe employee's salary as hls conLrlbuLlon Lo
ÞrovldenL lund every monLhŦ @he employer also conLrlbuLes cerLaln percenLage of Lhe salary of Lhe
employee Lo Lhe lundŦ @he conLrlbuLlons are lnvesLed ouLslde ln securlLlesŦ @he lnLeresL earned on lL
ls also credlLed Lo Lhe ÞrovldenL lund ccounLŦ L Lhe Llme of reLlremenLţ Lhe accumulaLed balance
ls glven Lo Lhe employeeŦ @ax LreaLmenL of provldenL fund depends upon Lhe Lype of provldenL fund
belng malnLalned by Lhe employerŦ Lmployee's provldenL fund may be of Lhe followlng 3 Lypesť
(|% tatutory Þrov|dent und
@hls ls seL up under Lhe provlslons of ÞrovldenL lund cLţ 1923 and ls malnLalned by CovernmenL
and SemlŴCovernmenL organlsaLlonsţ local auLhorlLlesţ rallwaysţ unlverslLles and recognlsed
educaLlonal lnsLlLuLlonsŦ
(||% kecogn|sed Þrov|dent und
@hls ls seL up under Lhe Lmployee's ÞrovldenL lund and Mlscellaneous Þrovlslons cLţ 1932 (Þl cLţ
1932) and ls malnLalned by prlvaLe secLor employeesŦ @he esLabllshmenLs covered under Þl cLţ
1932 have Lwo opLlonsŤ elLher Lo follow Lhe same scheme aL by Lhe CovernmenL under Lhe Þl cL or
drafL Lhelr own scheme of Þl buL geL recognlLlon from Commlssloner of lncome @axŦ
(|||% Dnrecogn|zed Þrov|dent und
lf a provldenL fund ls noL recognlzed by Lhe Commlssloner of lncome @axţ lL ls known as
unrecognlzed ÞlŦ 8esldes Lhese 3 fundsţ a person can also become a member of Þubllc ÞrovldenL
lundŦ
(|v% Þub||c Þrov|dent und
@he CenLral CovernmenL has esLabllshed Lhe Þubllc ÞrovldenL lund for Lhe beneflLs of general publlc
Lo moblllze personal savlngsŦ ny member of general publlc (wheLher salarled or self employed) can
parLlclpaLe ln Lhls fund by openlng a ÞrovldenL lund ccounL aL Lhe SLaLe 8ank of lndla or lLs
subsldlarles or oLher naLlonallsed banksŦ salarled employee can slmulLaneously become member
of employees provldenL fund (wheLher sLaLuLoryţ recognlzed or unreconlsed) and publlc provldenL
fundŦ ny amounL may be deposlLed (sub[ecL Lo mlnlmum of 378sŦ300 and maxlmum of 8sŦ70ţ 000
per annum) under Lhls accounLŦ @he accumulaLed sum ls repayable afLer 13 yearsŦ L presenLţ lL
carrles an lnLeresL raLe of 8Ʒ per annum whlch ls credlLed every year buL payable only Lhe Llme of
maLurlLyŦ
@ax LreaLmenL of Lhese provldenL funds (lŦeŦ Lhe exempLlon and deducLlon avallable ln respecL of
conLrlbuLlons Lo and paymenL from Lhese funds) ls summarlsed as followsť
Ŧ-o Þart|cu|ars tatutory Þ kecogn|sed Þ Dnrecogn|sed Þ Þub||c Þ
1 Lmployees ConLrlbuLlon
Lo Þl
LxempLed
from Lax
LxempLed up Lo 12Ʒ of
salary excess of
employer's
LxempLed from Lax Lmployer
does noL
conLrlbuLe
conLrlbuLlon ln
lncluded ln gross salary
2 ueducLlon under SecLlon
80C on employee's
conLrlbuLlon
vallable vallable noL vallable vallable
3 lnLeresL credlLed Lo Þl LxempLed
from Lax
LxempLlon up Lo
noLlfled raLe (9Ŧ30Ʒ)
per annum) Lxcess of
lnLeresL lncluded ln
gross salary
LxempLed from Lax LxempLed
from Lax
4 Lump sum paymenL
glven Lo employee on
reLlremenL
LxempLed
from Lax
LxempLed from Lax (lf
rendered conLlnuous
servlce of more Lhan 3
years
Lumpsum lncludes ť
a) Cwn ConLrlbuLlonŴ
LxempL
b) lnLeresL on own
conLrlbuLlon Ŵ Laxable
as lncome from oLher
sources
c) Lmployer's
conLrlbuLlon and
lnLeresL Lhere on
Laxable so lncluded ln
gross salary
LxempLed
from Lax









ÞarLlculars
@axable/nonŴ
@axable
LxempLlon/8
ebaLe
LlmlL
@ransporL llowance
ÞarLlally
@axable
8ebaLe
Maxlmum upLo 8sŦ800 ÞM and for physlcal
handlcapped upLo 8sŦ 1600 ÞM
Chlldren LducaLlon
llowance
ÞarLlally
@axable
8ebaLe Maxlmum upLo 8sŦ100 ÞM
Chlldren PosLel llowance
ÞarLlally
@axable
8ebaLe Maxlmum upLo 8sŦ300 ÞM
Pouse 8enL llowance
ÞarLlally
@axable

1) 30 Ʒ of salary ln case Lhe house ls slLuaLed ln
meLros (delhlţ Mumbalţ chennalţ calcuLLa) and
40 Ʒ ln oLher cases
2) cLual renL recelved
3) cLual renL pald Ŷ 10Ʒ of salary
Jhlchever ls less would be Laxable
(lully Laxable lf Lhe employee llves ln hls own house
for whlch no renL ls paldŦ)
LnLerLalnmenL llowance
ÞarLlally
@axable

ln case of governmenL employees
1) 3000 pŦa
2) 1/3 of salary
3) cLual amounL recelved
Jhlchever ls less would be Laxable
(ln case of any oLher employee lL ls fully Laxable)
Leave encashmenL
ÞarLlally
@axable

Leave encashmenL and encashmenL of slck leave aL
Lhe Llme of servlce ls fully LaxableŦ
Leave encashmenL recelved aL Lhe Llme of reLlremenL
ls fully exempL ln case of governmenL employeesŦ
ln case of oLher employees aL Lhe Llme of reLlremenL
ls exempLed upLo
1) 8sŦ 300000
2) verage salary * 10 mon
3) cLual amounL recelved
4) verage salary * number of monLhs leave due
Jhlchever ls less ls Laxable
CraLulLy
CraLulLy recelved ls fully exempL ln case of
governmenL employees
ln case of oLher employees
Ŧ lor employees covered under ÞaymenL of CraLulLy
cLŦŸ
LxempL up Lo leasL of followlng ť
(a) noLlfled llmlL ƹ 8sŦ 3ţ30ţ000
(b) 13 days verage Salary for every one compleLed
year of servlce (perlod exceedlng 6 monLhs ƹ1 year)
1/2 monLh's salary ƹ (verage monLhly salary or
wages x 13/26
(c) cLual amounL recelvedŦ

8Ŧ CLher LmployeesŴŴ LxempLed up Lo leasL of
followlng provlded servlce ls more Lhan 3 years or
employee has noL lefL servlce of hls own ť
(a) noLlfled llmlL ƹ 8sŦ 3ţ30ţ000
(b) 1/2 monLh's average salary for every one year of
compleLed servlce (monLhs Lo be lgnoredŦ)
(c) cLual amounL recelved

verage Salary ƹ Salary for 10 monLhs precedlng Lhe
monLh of reLlremenL dlvlded by 10Ŧ
Þenslon
Þenslon recelved ls fully exempL ln case of
governmenL employees
lor oLher employeesť
(a) lf oLher employee who recelve graLulLy also Ŵ
Lump sum amounL ls exempLed upLo commuLed
value of 1/3rd of ÞenslonŦ
(b) lf oLher employee who does noL geL graLulLy ŴŴ
Lump sum amounL ls exempLed upLo commuLed
value of 1/2 of penslonŦ
v8S CompensaLlon


CompensaLlon recelved aL Lhe Llme of volunLary
reLlremenL ls exempL up Lo 8s 3 lakhs under cerLaln
condlLlonsŦ
ueducLlonsť

LessŴllowance u/S 10(13)
cLual 8enL Þald
Ŵ LxempL
cLual amounL of P8 recelved or LxpendlLure on
renL ln excess of 1/10Lh of Lhe salary or 30Ʒ of
Salaryţ whlchever ls less
lnLeresL on P8 u/S 24 Ŵ ueducLlon Maxlmum 8sŦ1ţ30ţ000
8elmbursemenL of Medlcal
LxpŦ u/S 17(2)v
Ŵ ueducLlon Maxlmum 8sŦ13ţ000
u/S 80C Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
8efund of loan Laken for Lhe
consLrucLlon of Pouse
Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
CŦÞŦl / CŦÞŦl Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
CŦlŦS Ŵ ueducLlon cLual
LlC Þremlum Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
SubscrlpLlon of nŦSŦCŦ / ÞŦÞŦl Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
lnLeresL Cccurred on
lnvesLmenL ln nŦSŦCŦ
Ŵ ueducLlon Maxlmum 8sŦ13ţ000
CŦ@ŦuŦ / LŦlŦÞŦ / uLlÞ (MuLual
lund)
Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
unlL Llnked Þlan Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
@ulLlon lee (LlmlLed Lo 2
chlldren) Ǝ (fLer Oll Lh full
Llme course)
Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
3 ?ears llxed deposlL Ǝ 3
years Llme deposlL scheme
Ŵ ueducLlon Maxlmum 8sŦ1ţ00ţ000
80CCC
ÞaymenL of premlum for annulLy plan of LlC or any
oLher lnsurer ueducLlon ls avallable upLo a maxlmum
of 8sŦ 100ţ000/Ŵ
80CCu Ŵ ueducLlon Maxlmum 10Ʒ of 8Þ Ǝ u
Medl Clalm Þremlum u/S
80u
Ŵ ueducLlon
Maxlmum 8sŦ13ţ000 Ǝ for senlor clLlzens upLo 8sŦ
20000 (CLher Lhan above 8sŦ1ţ00ţ000)
Þremlum pald for Selfţ
Spouse Ǝ Chlldren
Ŵ ueducLlon Maxlmum 8sŦ13ţ000 (oLher Lhan above 8sŦ1ţ00ţ000)
Þremlum pald for ÞarenLs (lf
parenL ls noL senlor clLlzen)
Ŵ ueducLlon Maxlmum 8sŦ20ţ000 (CLher Lhan above 8sŦ1ţ00ţ000)
Þremlum pald for ÞarenLs (lf
parenL ls senlor clLlzen)
Ŵ ueducLlon Maxlmum 8sŦ20ţ000 (CLher Lhan above 8sŦ1ţ00ţ000)
u/S 80uu Ŵ ueducLlon
Pandlcapped dependenLs ťspouseţ son / daughLerţ
parenLs and broLher / slsLer Ŵ ueducLlon 8sŦ73ţ000 Lo
8sŦ1ţ00ţ000
u/S 80uu8 Ŵ ueducLlon
Maxlmum 8sŦ40ţ000 Ǝ for senlor clLlzens upLo
8sŦ60ţ000 (oLher Lhan above 8sŦ1ţ00ţ000)
u/S 80L Ŵ ueducLlon
lf lnLeresL ls earned on CovLŦ SecurlLlesţ 8ank
deposlLsţ ÞosL Cfflce deposlLsţ debenLuresţ naLlonal
Savlngs CerLlflcaLes eLcŦţ deducLlon up Lo 8sŦ 12ţ000/Ŵ
ls allowable from Lhe neL lncome afLer deducLlng Lhe
expendlLure lncurred ln earnlng lLŦ lurLherţ an
addlLlonal deducLlon up Lo 8sŦ 3ţ000/Ŵ wlll be
allowable on lnLeresL from CovLŦ SecurlLlesţ lf noL
already covered ln Lhe 8sŦ 12ţ000/Ŵ llmlLŦ
80L
LnLlre amounL (lnLeresL on hlgher LducaLlon/SLudy
loans)
80C ueducLlon for conLrlbuLlon Lo charlLable organlzaLlon
80CC ueducLlon ln respecL of house renL pald
80u ulsablllLy ueducLlon 8sŦ73ţ000 Lo 8sŦ1ţ00ţ000

ebates
lor Lhe assessmenL year 2003Ŵ04ţ Lhe amounL of rebaLe ls as follows Ŵ
1Ŧ @ax rebaLe under secLlon 88 ls avallable aL 30Ʒ of Lhe neL quallfylng amounL lf Lhe followlng Lwo
condlLlons are saLlsfledŦ
aŦ lncome chargeable under Lhe head ƍSalarlesƍ (before glvlng deducLlon under secLlon 16) does noL
exceed 8sŦ 1ţ00ţ000Ť and
bŦ lncome chargeable under Lhe head ƍSalarlesƍ ls noL less Lhan 90Ʒ of gross LoLal lncomeŦ
2Ŧ lf gross LoLal lncome does noL exceed 8sŦ 1ţ30ţ000 ţLax rebaLe ls avallable aL 20Ʒ of Lhe neL
quallfylng amounLŦ
3Ŧ lf gross LoLal lncome exceeds 8sŦ 1ţ30ţ000 buL does noL exceed 8sŦ 3ţ00ţ000ţ Lax rebaLe ls avallable
aL 13Ʒ of Lhe neL quallfylng amounLŦ
4Ŧ lf gross LoLal lncome exceeds 8sŦ 3ţ00ţ000 Lax rebaLe under secLlon 88 ls noL avallableŦ
8ebaLe for senlor clLlzens
@axpayers of Lhe age of slxLyŴflve and aboveţ aL any Llme durlng Lhe relevanL prevlous yearţ wlll geL
an addlLlonal rebaLe from Lax payable up Lo a maxlmum of 8s 20ţ000/ŴŦ
8ebaLe for women Laxpayers
ll women resldenL ln lndla geL a speclal rebaLe up Lo 8sŦ 3ţ000/Ŵ ouL of Lhe Lax payable by LhemŦ
@hls rebaLe wlll noL be allowable for women Lax payers above slxLy flve aL any Llme durlng Lhe
relevanL prevlous yearţ who wlll geL senlor clLlzen rebaLe of 8sŦ 20ţ000/ŴŦ

TBL VLU UF PUISITS
ÞerqulslLes are deflned as any casual emolumenL or beneflL aLLached Lo an offlce or poslLlon ln
addlLlon Lo salary or wagesŦ lL denoLes someLhlng LhaL beneflLs a man by golng lnLo hls pockeLŤ lL
does noL cover mere relmbursemenL of necessary dlsbursemenLsŦ Such beneflLs are normally glven
ln klnd buL should be capable of belng measurable ln money LermsŦ ÞerqulslLes are Laxable and
lncluded ln gross salary only lf Lhey are (l) allowed by an employer Lo an employeeţ (ll) llowed
durlng Lhe conLlnuaLlon of employmenLţ (lll) dlrecLly dependenL on servlceţ (lv) resulLlng ln Lhe
naLure of personal advanLage Lo Lhe employee and (v) derlved by vlrLue of employer's auLhorlLyŦ
s per SecLlon 17 (2) of Lhe cLţ perqulslLes lncludeť
1Ŧ value of renL free accommodaLlon provlded Lo Lhe employee by Lhe employerŦ
2Ŧ value of concesslon ln Lhe maLLer of renL ln respecL of accommodaLlon provlded Lo Lhe employee
by hls employerŦ
3Ŧ value of any beneflL or amenlLy granLed free of cosL or aL a concesslonal raLe ln any of Lhe
followlng casesť
a) 8y a company Lo an employee who ls a dlrecLor Lhereof
b) 8y a company Lo an employee who has subsLanLlal lnLeresL ln Lhe company
c) 8y any employer Lo an employee who ls nelLher a dlrecLorţ nor has subsLanLlal lnLeresL ln Lhe
companyţ buL hls moneLary emolumenLs under Lhe head 'Salarles' exceeds 8sŦ30ţ 000Ŧ
4Ŧ ny sum pald by Lhe employer Lowards any obllgaLlon of Lhe employeeŦ
3Ŧ ny sum payable by employer Lo effecL an assurance on Lhe llfe of assesseeŦ
6Ŧ @he value of any oLher frlnge beneflL glven Lo Lhe employee as may be prescrlbedŦ

IŦ CIIC@I- ÞLkÇDII@L
lor Lax purposesţ perqulslLes speclfled under SecLlon 17 (2) of Lhe cL may be classlfled as followsť
(1) ÞerqulslLes LhaL are Laxable ln case of every employeeţ wheLher speclfled or noL
(2) ÞerqulslLes LhaL are Laxable ln case of speclfled employees only
(3) ÞerqulslLes LhaL are exempL from Lax for all employees
(1) ÞerqulslLes @axable ln case of ll Lmployees

(1% @he fo||ow|ng perqu|s|tes are taxab|e |n case of every emp|oyeeţ whether spec|f|ed or notť
1Ŧ 8enL free house provlded by employer
2Ŧ Pouse provlded aL concesslonal raLe
3Ŧ ny obllgaLlon of employee dlscharged by employer eŦgŦ paymenL of club or hoLel bllls of
employeeţ salary Lo domesLlc servanLs engaged by employeeţ paymenL of school fees of employees'
chlldren eLcŦ
4Ŧ ny sum pald by employer ln respecL of lnsurance premlum on Lhe llfe of employee
3Ŧ noLlfled frlnge beneflLs (on whlch frlnge beneflL Lax ls noL appllcable) Ŷ lL lncludes lnLeresL free or
concesslonal loans Lo employeesţ use of movable asseLsţ Lransfer of moveable asseLsŦ

(2% Þerqu|s|tes taxab|e |n case of pec|f|ed Lmp|oyees on|y
@he followlng perqulslLes are Laxable ln case of such employeesť
1Ŧ lree supply of gasţ elecLrlclLy or waLer supply for household consumpLlon
2Ŧ lree or concesslonal educaLlonal faclllLles Lo Lhe members of employees household
3Ŧ lree or concesslonal LransporL faclllLles
4Ŧ Sweeperţ waLchmanţ gardener and personal aLLendanL
3Ŧ ny oLher beneflL or amenlLy Speclfled employee ls an employee who ls elLher a dlrecLor or has
subsLanLlal lnLeresL ln Lhe company where he ls employed or ls drawlng moneLary salary of more
Lhan 8sŦ30ţ 000 durlng Lhe prevlous yearŦ

(3% Þerqu|s|tes wh|ch are tax free for a|| the emp|oyees
@hls caLegory lncludes perqulslLes whlch are Lax free for Lhe employees and also oLher perqulslLes on
whlch employer has Lo pay a Lax (called lrlnge 8eneflL @ax) lf Lhey are glven Lo Lhe employees and so
are noL Laxable for LhemŦ
1Ŧ Medlcal beneflLs (provlded wlLhln or ouL of lndla) sub[ecL Lo llmlLsŦ
2Ŧ value of Leave @ravel Concesslon ln lndlaŦ
3Ŧ lree meals provlded Lo Lhe employees durlng worklng hoursŦ
4Ŧ mounL spenL by Lhe employer as lLs conLrlbuLlon Lo sLaff welfare schemesŦ
3Ŧ LapLops and compuLers provlded for personal useŦ
6Ŧ 8enL free offlclal accommodaLlon provlded Lo a !udge of Plgh CourL or Supreme CourL or an
offlclal of ÞarllamenL lncludlng MlnlsLer and Leader of CpposlLlon ln ÞarllamenLŦ
7Ŧ PealLh lnsurance Þremlum of employee or member of household pald by Lhe employerŦ
8Ŧ ll such faclllLles (llke moLor carţ lunch refreshmenLsţ Lravelllngţ Lourlngţ glfLţ credlL cardsţ club
eLcŦ) provlded by employer on whlch employer has Lo pay lrlnge 8eneflL @axŦ







Salary Structure
ÞarLlculars mounL mounL
8aslc Salary
lees
Commlsslon
8onus
CraLulLy
Leave LncashmenL
Þenslon
8eLrenchmenL CompensaLlon
CompensaLlon 8ecelved under volunLary 8eLlremenL Scheme
llowances
uearness llowance
Pouse 8enL llowance
Chlldren LducaLlon llowance
PosLel LxpendlLure llowance
LnLerLalnmenL llowance
Medlcal llowance
Conveyance llowance
ClLy CompensaLory llowance
unlform llowance
Þrofesslonal uevelopmenL llowance
@ransporL llowance
CLher llowances
ÞerqulslLes
ny obllgaLlon of employee pald by employer
ccommodaLlon
Shares and SecurlLles lssued under LSCÞ
Lmployer's ConLrlbuLlon Lo SuperannuaLlon lund ln excess of 8sŦ 100000
lnsurance Þremlum
Medlcal laclllLy
CLher lrlnge 8eneflLs
Leave @ravel Concesslon
ConLrlbuLlon of Lmployer Lo ÞrovldenL lund
lnLeresL on 8ecognlsed ÞrovldenL lund
ny CLher lLem
Cross Salary
Lessť ueducLlon u/s 16
a) LnLerLalnmenL llowance
b) @ax on LmploymenL/Þrofesslon @ax
@axable Salary


Section ŵŴ
SecLlon 10 of lncome Lax acL deflnes LhaL some lncome are exempLed from lncome Lax means Lhere
ls no lncome Lax on Lhese lncomeŦ Some of Lhese lncomes are fully exempLed from lncome Lax and
some are some exempLlon llmlLŦ
Llke agrlculLure lncome ls fully exempLed from lncome Lax whereas mlnor lncome clubbed wlLh
lndlvldual has Lhe exempLlon llmlL of 1300Ŧ So lL ls necessary Lo remember all Lhese exempLlons
before calculaLlng somebody lncome LaxŦ
ect|on -ature of Income Lxempt|on ||m|tţ |f any
10(1) grlculLural lncome
10(2) Share from lncome of Pul
10(2) Share of proflL from flrm
10(3) Casual and nonŴrecurrlng recelpLs
Jlnnlngs from races 8sŦ2300/Ŵ
oLher recelpLs 8sŦ3000/Ŵ
10(10u) 8ecelpLs from llfe lnsurance Þollcy
10(16) Scholarshlps Lo meeL cosL of educaLlon
10(17) llowances of MÞ and MLŦ
lor ML noL exceedlng 8sŦ
600/Ŵ per monLh
10(17) wards and rewards
(l) from awards by CenLral/SLaLe CovernmenL
(ll) from approved awards by oLhers
(lll) pproved rewards from CenLral Ǝ SLaLe CovernmenLs
10(26)
lncome of Members of scheduled Lrlbes resldlng ln cerLaln
areas ln norLh LasLern SLaLes or ln Lhe Ladakh reglonŦ
Cnly on lncome arlslng ln
Lhose areas or lnLeresL on
securlLles or dlvldends
10(26) lncome of resldenL of Ladakh
Cn lncome arlslng ln Ladakh or
ouLslde lndla
10(30)
(l) Subsldy from @ea 8oard under approved scheme of
replanLaLlon

10(31)
(ll) Subsldy from concerned 8oard under approved Scheme
of replanLaLlon

10(32) Mlnorƌs lncome clubbed wlLh lndlvldual upLo 8sŦ 1ţ300/Ŵ
10(33)
ulvldend from lndlan Companlesţ lncome from unlLs of unlL
@rusL of lndla and muLual funds and lncome from venLure

CaplLal Company/fundŦ
10()
ÞroflL of newly esLabllshed underLaklng ln free Lrade zones
elecLronlc hardware Lechnology park on sofLware
Lechnology park for 10 years (neL beyond 10 year from
2000Ŵ01)

10(8)
ÞroflL of 100Ʒ exporL orlenLed underLaklngs manufacLurlng
arLlcles or Lhlngs or compuLer sofLware for 10 years (noL
beyond 10 years from 2000Ŵ01)

10(C)
ÞroflL of newly esLabllshed underLaklng ln lŦlŦuŦC or lŦCŦCŦ ln
norLhŴLasLern 8eglon for 10 years

lncome from
lnLeresL

10(13)(l)(llb)(llc)
lnLeresLţ premlum on redempLlon or oLher paymenLs from
noLlfled securlLlesţ bondsţ CaplLal lnvesLmenL bondsţ 8ellef
bonds eLcŦ
@o Lhe exLenL menLloned ln
noLlflcaLlon
10(13)(lv)(h)
lncome from lnLeresL payable by a Þubllc SecLor Company
on noLlfled bonds or debenLures

10(13)(lv)(l)
lnLeresL payable by CovernmenL on deposlLs made by
employees of CenLral or SLaLe CovernmenL or Þubllc SecLor
Company of money due on reLlremenL under a noLlfled
scheme

10(13)(vl) lnLeresL on noLlfled Cold ueposlL bonds
10(13)(vll) lnLeresL on noLlfled bonds of local auLhorlLles
lncome from
Salary

10(3) Leave @ravel asslsLance/ concesslon
noL Lo exceed Lhe amounL
payable by CenLral
CovernmenL Lo lLs employees
10(38)
8emuneraLlon of Lechnlclans havlng speclallsed knowledge
and experlence ln speclfled flelds (noL resldenL ln any of Lhe
four precedlng flnanclal years) whose servlces commence
afLer 31Ŧ3Ŧ93 and Lax on whose remuneraLlon ls pald by Lhe
employer
LxempLlon ln respecL of
lncome ln Lhe form of Lax pald
by employer for a perlod upLo
48 monLhs
10(7)
llowances and perqulslLes by Lhe governmenL Lo clLlzens
of lndla for servlces abroad

10(8)
8emuneraLlon from forelgn governmenLs for duLles ln lndla
under CooperaLlve Lechnlcal asslsLance programmesŦ
LxempLlon ls provlded also ln respecL of any oLher lncome
arlslng ouLslde lndla provlded Lax on such lncome ls
payable Lo LhaL CovernmenLŦ

10(10) ueaLhŴcumŴreLlremenL CraLulLyŴ
(l) from CovernmenL
(ll) under paymenL of CraLulLy cL 1972
mounL as per SubŴsecLlons
(2)ţ (3) and (4) of Lhe cLŦ
(lll) ny oLher
upLo oneŴhalf monLhs salary
for each year of compleLed
servlceŦ
10(10) CommuLaLlon of ÞenslonŴ
(l) from governmenLţ sLaLuLory CorporaLlon eLcŦ
(ll) from oLher employers Jhere graLulLy ls payable Ŵ
value of 1/3 penslonŦ Jhere
graLulLy ls noL payable Ŵ value
of 1/2 penslonŦ
(lll) from fund seL up by LlC u/s 10(238)
10(10) LncashmenL of unuLlllsed earned leave
(l) from CenLral or SLaLe governmenL
(ll) from oLher employers
upLo an amounL equal Lo 10
monLhs salary or 8sŦ
1ţ33ţ360/Ŵ whlchever ls less
10(108) 8eLrenchmenL compensaLlon
mounL u/sŦ 23l(b) of
lndusLrlal ulspuLe cL 1947 or
Lhe amounL noLlfled by Lhe
governmenLţ whlchever ls lessŦ
10(10C)
mounL recelved on volunLary reLlremenL or LermlnaLlon of
servlce or volunLary separaLlon under Lhe schemes
prepared as per 8ule 28 from publlc secLor companlesţ
sLaLuLory auLhorlLlesţ local auLhorlLlesţ lndlan lnsLlLuLe of
@echnologyţ speclfled lnsLlLuLes of managemenL or under
any scheme of a company or CoŴoperaLlve SocleLy
mounL as per Lhe Scheme
sub[ecL Lo maxlmum of 8sŦ 3
lakh
10(11)
ÞaymenL under ÞrovldenL lund cL 1923 or oLher noLlfled
funds of CenLral CovernmenL

10(12) ÞaymenL under recognlsed provldenL funds
@o Lhe exLenL provlded ln rule
8 of ÞarL of lourLh Schedule
10(13) ÞaymenL from approved SuperannuaLlon lund
10(13) Pouse renL allowance leasL ofŴ
(l) acLual allowance

(ll) acLual renL ln excess of 10Ʒ
of salary

(lll) 30Ʒ of salary ln Mumbalţ
Chennalţ uelhl and CalcuLLa
and 40Ʒ ln oLher places
10(14)
Þrescrlbed żSee 8ule 288 (1)Ž speclal allowances or beneflLs
speclflcally granLed Lo meeL expenses wholly necessarlly
and excluslvely lncurred ln Lhe performance of duLles
@o Lhe exLenL such expenses
are acLually lncurredŦ
10(18)
Þenslon lncludlng famlly penslon of reclplenLs of noLlfled
gallanLry awards

LxempLlons Lo
nonŴclLlzens only

10(6)(l)(a) and (b)
(l) passage money from employer for Lhe employee and hls
famlly for home leave ouLslde lndla


(ll) Þassage money for Lhe employee and hls famlly Lo
ƌPome counLryƌ afLer reLlremenL/LermlnaLlon of servlce ln
lndlaŦ

10(6)(ll)
8emuneraLlon of members of dlplomaLlc mlsslons ln lndla
and Lhelr sLaffţ provlded Lhe members of sLaff are noL
engaged ln any buslness or professlon or anoLher
employmenL ln lndlaŦ

10(6)(vl)
8emuneraLlon of employee of forelgn enLerprlse for
servlces rendered durlng hls sLay ln lndla ln speclfled
clrcumsLances provlded Lhe sLay does noL exceed 90 days ln

LhaL prevlous yearŦ
10(6)(xl)
8emuneraLlon of forelgn CovernmenL employee on Lralnlng
ln cerLaln esLabllshmenLs ln lndlaŦ

LxempLlons Lo
fundsţ lnsLlLuLlonsţ
eLcŦ

10(14)
Þubllc llnanclal lnsLlLuLlon from exchange rlsk premlum
recelved from person borrowlng ln forelgn currency lf Lhe
amounL of such premlum ls credlLed Lo a fund speclfled ln
secLlon 10(23L)

10(13)(lll) CenLral 8ank of Ceylon from lnLeresL on securlLles
10(13)(v)
SecurlLles held by Jelfare Commlssloners 8hopal Cas
vlcLlmsţ 8hopal from lnLeresL on securlLles held ln 8eserve
8ankƌs SCL ccounL noŦ SL/uPŴ048

10(20) any local uLhorlLy
(a) 8uslness lncome derlved
from Supply of waLer or
elecLrlclLy anywhereŦ Supply of
oLher commodlLles or servlce
wlLhln lLs own [urlsdlcLlonal
areaŦ

(b) lncome from house
properLyţ oLher sources and
caplLal galnsŦ
10(20) Pouslng or oLher uevelopmenL auLhorlLles
10(21) pproved SclenLlflc 8esearch ssoclaLlon
10(23)
noLlfled SporLs ssoclaLlon/ lnsLlLuLlon for conLrol of
crlckeLţ hockeyţ fooLballţ Lennls or oLher noLlfled gamesŦ

10(23) noLlfled professlonal assoclaLlon/lnsLlLuLlon
ll lncome excepL from house
properLyţ lnLeresL or dlvldends
on lnvesLmenLs and renderlng
of any speclflc servlces
10(23) 8eglmenLal fund or nonŴpubllc fund
10(23) lund for welfare of employees or Lhelr dependenLsŦ
10(238) lund seL up by LlC of lndla under a penslon scheme
10(238)
Þubllc charlLable LrusLs or reglsLered socleLles approved by
khadl or vlllage lndusLrles commlsslon

10(2388) ny auLhorlLy for developmenL of khadl or vlllage lndusLrles
10(2388)
SocleLles for admlnlsLraLlon of publlcţ rellglous or charlLable
LrusLs or endowmenLs or of reglsLered rellglous or
charlLable SocleLlesŦ

10(23888)
Luropean Lconomlc CommunlLy from lncome from
lnLeresLţ dlvldend or caplLal galns

10(2388C) S8C lund
10(23C)
CerLaln funds for rellefţ charlLable and promoLlonal
purposesţ cerLaln educaLlonal or medlcal lnsLlLuLlons

10(23u) noLlfled MuLual lunds
10(23L) noLlfled Lxchange 8lsk dmlnlsLraLlon lunds
10(23L)
noLlfled lnvesLors ÞroLecLlon lunds seL up by recognlsed
SLock Lxchanges

10(23l8)
venLure caplLal lund/ company seL up Lo ralse funds for
lnvesLmenL ln venLure CaplLal underLaklng
lncome from lnvesLmenL ln
venLure caplLal underLaklng
10(23C)
lnfrasLrucLure caplLal fundţ or lnfrasLrucLure caplLal
company
lncome from dlvldendţ lnLeresL
and long Lerm caplLal galns
from lnvesLmenL ln approved
lnfrasLrucLure enLerprlse
10(24) 8eglsLered @rade unlons
lncome from house properLy
and oLher sources
10(23)(l) ÞrovldenL lunds
lnLeresL on securlLles and
caplLal galns from Lransfer of
such securlLles
10(23)(ll) 8ecognlsed ÞrovldenL lunds
10(23)(lll) pproved SuperannuaLlon lunds
10(23)(lv) pproved CraLulLy lunds
10(23)(v) ueposlL llnked lnsurance funds
10(23) Lmployees SLaLe lnsurance lund
10(268)(2688)
and (27)
CorporaLlon or any oLher body seL up or flnanced by and
governmenL for welfare of scheduled casLe/ scheduled
Lrlbes/backward classes or mlnorlLles communlLles

10(29) MarkeLlng auLhorlLles
lncome from leLLlng of
godown and warehouses
10(29)
CerLaln 8oards such as coffee 8oard and oLhers and
speclfled uLhorlLles



Form ŵź
If you are salaried employee in an organization, then you will get the salary after deducting tax by
Lhe employerŦ @hls process ls called as @ax ueducLlon aL Source (@uS)Ŧ Lvery company has Lo geL
Lhe @lnŦ @ln ls @ax ldenLlflcaLlon numberŦ @hls number ls lssued Lo person who ls responslble Lo
deducL @ax on paymenLs made Lo employeesŦ

L Lhe end of flnanclal yearţ company musL lssue a form 16 whlch conLalns Lhe deLalls abouL Lhe
salary earned by LhaL employee and how much Lax deducLedŦ lL wlll have deLalls on each monLhŦ ln
slmple Lerms lorm 16 ls deLalls abouL Lhe Lax deducLed by Lhe employer ln behalf of employeeŦ @he
same wlll be pald Lo governmenL by Lhe companyŦ Many people Lhlng LhaL geLLlng Lhe lorm 16 alone
ls enough for Lhe Lax flllngŦ @ax payer has Lo use Lhe lorm 16 Lo flle Lhe l@ reLurn every flnanclal year
endŦ



Format of Form ŵź
name and address of Lhe Lmployer

name and deslgnaLlon of Lhe Lmployee
Þn/Cl8 nCŦ @n Þn/Cl8 nCŦ

@uS Clrcle where nnual 8eLurn /sLaLemenL under
secLlon 206 ls Lo be flled
Þerlod ssessmenL
year 19
l8CM @C


L@I k¥ ÞI - -¥ @nLk I-CML - @O LDC@L
1Ŧ Cross salary
8sŦ__________
2Ŧ Less ť llowance Lo Lhe exLenL exempL
under secLlon 10
8sŦ__________
3Ŧ 8a|ance (1Ŵ2)

4Ŧ ueducLlonsť

a) SLandard deducLlon 8sŦ_______

b) LnLerLalnmenL allowance 8sŦ_______

c) @ax on LmploymenL 8sŦ ______

3Ŧ ggregaLe of 4 (a Lo c)
8sŦ________
6Ŧ lnCCML CP8CL8LL unuL8 @PL
PLu 'SL8lLu' (3Ŵ3)
8sŦ_________
7Ŧ dd ť ny oLher lncome reporLed by Lhe
employee
8sŦ__________
8Ŧ C8CSS @C@L lnCCML (6+7)
8sŦ__________
9Ŧ uLuuC@lCnS unuL8
CPÞ@L8 vlŴ
C8CSS
MCun@
CuLll?lnC
MCun@
uLuuC@l8LL
MCun@

a)
8sŦ________ 8sŦ________ 8sŦ________
b)
8sŦ________ 8sŦ________ 8sŦ________
c)
8sŦ________ 8sŦ________ 8sŦ________
d)
8sŦ________ 8sŦ________ 8sŦ________
10Ŧ ggregaLe of deducLlble amounLs under
ChapLer vlŴ
8sŦ_____________
11Ŧ @C@L lnCCML (8Ŵ10)
8sŦ_____________
12Ŧ @O Cn @C@L lnCCML
8sŦ_____________



8L8@L nu 8LLlLl unuL8 CPÞ@L8 vlll


lŦ under secLlon 88
(please speclfy)
C8CSS MCun@ CuLll?lnC
MCun@
@O 8L8@L/
8LLlLl

a) 8sŦ_______ 8sŦ_______
b) 8s________ 8sŦ_______
c) 8s_________ 8sŦ_______
d) 8s_________ 8sŦ_______
e) 8s_________ 8sŦ_______
f) @oLalż(a) Lo (e)Ž 8s_________ 8sŦ_______ 8sŦ_______
llŦ under secLlon 88
(please speclfy)
C8CSS MCun@ CuLll?lnC
MCun@

a) 8sŦ__________
b) 8sŦ__________
c) @oLal ż(a)+(b)Ž 8sŦ__________ 8sŦ________ 8sŦ_________
lllŦ under secLlon 89(aLLach deLalls)
14Ŧ CC8LC@L Cl @O 8L8@LS nu 8LLlLl
@ 13 8CvL żl(l)+ll( C)+lllŽ
8sŦ____________
13Ŧ @O Þ?8LL (12Ŵ14) nu Su8CP8CL
@PL8LCn
8sŦ____________
16Ŧ LLSS ť @O uLuuC@Lu @ SCu8CL 8sŦ__________
17Ŧ @O Þ?8LL/8Llunu8LL (13Ŵ16) 8sŦ_________


L@I @O LDC@L - LÞI@L I-@ CL-@k GVLk-ML-@ CCD-@
MCun@ u@L Cl Þ?MLn@ nML Cl 8nk nu 88nCP
JPL8L @O uLÞCSl@Lu





Cert|f|ed that a sum of ksŦ(|n words% has
been deducted at source and pa|d to the cred|t of the Centra| GovernmentŦ
urther cert|f|ed that the above |nformat|on |s true and correct as per recordsŦ

Þ|ace
|gnature of the person respons|b|e for deduct|on of tax
ate u|| -ame
es|gnat|on


See secLlons 13 and 17 and rule 3Ŧ lurnlsh separaLe deLalls of value of Lhe perqulslLes and proflLs ln lleu of or ln
addlLlon Lo salary or wagesŦ


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