Showing posts with label Income from Salaries. Show all posts
Showing posts with label Income from Salaries. Show all posts

Wednesday, 5 July 2017

Taxability of Retirement Benifits under Income from Salary

Leave Encashment
110(10AA)Encashment of unutilized earned leave at the time of retirement of Government employeesFully Exempt

Exemptions and Deductions from Salary Income


110(13A)read with Rule 2AHouse rent allowanceLeast of the following is exempt:
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Chennai)
c) Rent paid minus 10% of salary
* Salary = Basic + DA (if part of retirement benefit) + Turnover based Commission
i. Fully taxable, if HRA is received by an employee who is living in his own house or if he does not pay any is self occupied.
ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10-10-2013].

Defination of Salary as Per Income Tax Act

Salary  include:
a) Wages
b) Annuity
c) Pension
d) Gratuity
e) Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages
f) Advance of Salary
g) Leave Encashment