COMPUTATION OF INCOME FROM SALARY

COMPUTATION OF INCOME FROM SALARY

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COMPONENTS OF SALARY

FULLY TAXABLE COMPONENTS AND ALLOWANCES

FULLY EXEMPTED ALLOWANCES PARTLY EXEMPTED ALLOWANCES RETIREMENT BENEFITS TAXABLE PERQUISITIES

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COMPONENTS OF SALARY FULLY TAXABLE COMPONENTS AND ALLOWANCES

• ADVANCE SALARY• ARREAR SALARY• BASIC SALARY• BONUS• CITY COMPENSATORY ALLOWANCES • COMMISSION AS A FIXED PERCENTAGE ON

TURNOVER • DEARNESS ALLOWANCE OR PAY• ENTERTAINMENT ALLOWANCES

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• FEES • FIXED MEDICAL ALLOWANCES • FAMILY ALLOWANCE • LEAVE ENCASHMENT ALLOWANCE • LUNCH / TIFFIN ALLOWANCES • MONTHLY OR UNCOMMUTED ALLOWANCE • NON – PRACTICING ALLOWANCE • OVERTIME ALLOWANCE • SERVANT ALLOWANCE • WARDEN ALLOWANCE

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FULLY EXEMPTED ALLOWANCES (sec.10(14) RULE 2BB)

TRAVELLING ALLOWANCE CONVEYANCE ALLOWANCE DAILY ALLOWANCE HELPER ALLOWANCE ACADEMIC ALLOWANCE UNIFORM ALLOWANCE

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PARTLY EXEMPTED ALLOWANCES (sec.10(14) RULE 2BB)

ALLOWANCES PURPOSE OF ALLOWANCE

EXEMPTION LIMIT

CHILDREN EDUCATION ALLOWANCE

FOR EMPLOYEES CHILDREN

RS.100 PER MONTH, PER CHILD, RESTRICTED TO 2 CHILDREN

CHILDREN HOSTEL EXPENDITURE ALLOWANCE

TO MEET THE HOSTEL EXPENDITURE OF EMPLOYEES CHILODREN

RS.300 PER MONTH, PER CHILD, RESTRICTED TO 2 CHILDREN

RUNNING ALLOWANCE GIVEN TO EMPLOYEES WORKING IN THE TRANSPORT SECTOR TO MEET THEIR PERSONAL EXPENDITURE DURING TRANSPORT

LEAST OF THE FOLLOWING :-1. 70% OF THE

AMOUNT RECEIVED 2. RS.10000 PER

MONTH

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ALLOWANCES PURPOSE OF ALLOWANCE

EXEMPTION LIMIT

TRANSPORT ALLOWANCE

GIVEN TO EMPLOYEES FOR TRAVELLING FROM RESIDENCE TO OFFICE AND BACK

RS.800 PER MONTH

MINING OR UNDERGROUND ALLOWANCE

GIVEN TO EMPLOYEES WORKING IN UNDERGROUND MINES

RS.800 PER MONTH

TRIBAL ALLOWANCE INDIVIDUALS EMPLOYED IN TRIBAL AREAS IN NOTIFIED STATES

RS.200 PER MONTH

HILL COMPENSATORY ALLOWANCE

INDIVIDUALS EMPLOYED IN NOTIFIED HILLY AREAS

RS.300 TO RS.7000 PER MONTH (DEPENDING ON THE PLACE)

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ALLOWANCES PURPOSE OF ALLOWANCE

EXEMPTION LIMIT

BORDER/ REMOTE/ DISTURBED AREA ALLOWANCE

INDIVIDUALS EMPLOYED IN BORDER/ REMOTE/ DISTURBED AREA

RS.200 TO RS.1300 PER MONTH (DEPENDING ON THE PLACE)

FIELD AREA ALLOWANCE

NOTE: AN EMPLOYEE CANNOT CLAIM EXEMPTION UNDER BORDER AREA ALLOWANCE, IF HE IS IN RECEIPT OF THIS ALLOWANCE

RS.2600 PER MONTH.

MODIFIED FIELD AREA ALLOWANCE

NOTE: AN EMPLOYEE CANNOT CLAIM EXEMPTION UNDER BORDER AREA ALLOWANCE, IF HE IS IN RECEIPT OF THIS ALLOWANCE

RS. 1000 PER MONTH.

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ALLOWANCES PURPOSE OF ALLOWANCE

EXEMPTION LIMIT

COUNTER INSURGENCY ALLOWANCE

INDIVIDUALS IN ARMED FORCES, OPERATING AWAY FROM THEIR PERMANENT LOCATIONS

RS.3900 PER MONTH

HIGH ALTITUDE ALLOWANCE

ARMED FORCES OPERATING IN HIGH ALTITUDE AREAS.

RS.1060 TO RS.1600 PER MONTH (DEPENDING ON THE PLACE)

SPECIAL COMPENSATORY HIGHLY ACTIVE FIELD AREA ALLOWANCE

ARMED FORCES OPERATING IN HIGHLY ACTIVE AREAS.

RS.3250 PER MONTH

ISLAND DUTY ALLOWANCE

ARMED FORCES EMPLOYED IN ANDAMAN AND NICOBAR AND LAKSHADWEEP ISLANDS

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HOUSE RENT ALLOWANCE U/S 10(13A)/ RULE 2A

CONDITION DOES NOT LIVE IN HIS OWN HOUSE PAYS RENT IN EXCESS OF 10% OF HIS

SALARY FOR HIS RESIDENTIAL ACCOMATION.

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COMPUTATION OF TAXABLE HRA Amount received during the FYTowards HRA xxxxLESS: EXEMPTION (least of the following)1. Amount received as HRA2. 50% of salary (if chennai, mumbai, kolkata and delhi)OR 40% of salary (for other places)3. Rent paid xxx LESS: 10% of salary (xx) (xxx)

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COMPUTATION OF SALARY FOR HRA

BASIC SALARY DA CONSIDERED FOR RETIREMENT

BENEFITS COMMISSION AS A FIXED PERCENTAGE

ON TURNOVER OF EMPLOYEES

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RETIREMENT BENEFITS

GRATUITY SEC10(10)

PENSION SEC10(10A)

LEAVE ENCASHMENT SEC10(10AA)

RETRENCHMENT COMPENSATION

SEC 10(10B)

VOLUNTARY RETIREMENT

COMPENSATION SEC10(10C)

TAX TREATMENT

OF PROVIDENT

FUNDS

RETIREMENT BENEFITS

GRATUITY SEC10(10)

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GRATUITY SEC10(10)

GRATUITY SEC10(10)

RECEIVED BY NON-GOVT EMPLOYEE

COVERED UNDER POGA

NOT COVERED

UNDER POGA

RECEIVED BY GOVT

EMPLOYEE

FULLY EXEMPT

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GRATUITY SEC10(10) When employee is covered under POGA

Amount received during the FYTowards GRATUITY xxxxLESS: EXEMPTION (least of the following)1. Amount received2. 15/26*last drawn salary *no.of years of completed service 3. Notified limit of Rs.10lakh. (xxx)

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COMPUTATION OF SALARY FOR TAXABLE GRATUITY

BASIC SALARY XXXX DA CONSIDERED FOR RETIREMENT BENEFITS XXXX COMMISSION AS A FIXED % ON TURNOVER OF EMPLOYEES XXXX

SALARY FOR GRATUITY

EXEMPTION XXXX

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GRATUITY SEC10(10)When employee is NOTcovered under POGA

Amount received during the FYTowards GRATUITY xxxxLESS: EXEMPTION (least of the following)1. Amount received2. 1/2*average monthly salary *no.of years of completed service 3. Notified limit of Rs.10lakh. (xxx)

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COMPUTATION OF SALARY FOR TAXABLE GRATUITY

BASIC SALARY XXXX DA CONSIDERED FOR RETIREMENT BENEFITS XXXX COMMISSION AS A FIXED % ON TURNOVER OF EMPLOYEES XXXX SALARY FOR GRATUITY

EXEMPTION XXXX

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PENSION SEC10(10A)PENSION

COMMUTED PENSION

UNCOMMUTED PENSION

GOVT EMPLOYEE

NON-GOVT EMPLOYEE

FULLY TAXABLE

GOVT EMPLOYEE

NON-GOVT EMPLOYEE

EMPLOYEE RECEIVES GRATUITY

EMPLOYEE DOES NOT RECEIVE

GRATUITY

FULLY EXEMPT

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COMPUTATION OF TAXABLE COMMUTED PENSION

Commuted pension received xxxxLESS: EXEMPTION 1/3rd of full value of pension received (xxx)

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COMPUTATION OF TAXABLE COMMUTED PENSION

Commuted pension received xxxxLESS: EXEMPTION 1/2* of full value of pension received (xxx)

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LEAVE ENCASHMENT U/S10(10AA)

LEAVE ENCASHMENT

LEAVE ENCASHMENT ON RETIREMENT

GOVT EMPLOYEE

NON-GOVT EMPLOYEE

LEAVE ENCASHMENT WHILE IN SERVICE

FULLY TAXABLE

FULLY EXEMPT

PARTLY EXEMPT

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COMPUTATION OF TAXABLE LEAVE SALARY ON RETIREMENT

Amount actuallyreceived xxxxLESS: EXEMPTION (least of the following)1. Amount received2. average monthly salary *10 months3. Notified limit of Rs.3lakh. 4. Period of earned leave to the Credit of the employee *average Monthly salary (xxx)

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COMPUTATION OF SALARY FOR TAXABLE LEAVE ENCASHMENT

(FOR 10 MONTHS) BASIC SALARY XXXX DA CONSIDERED FOR RETIREMENT BENEFITS XXXX COMMISSION AS A FIXED PERCENTAGE ON TURNOVER OF EMPLOYEES XXXX

SALARY FOR LEAVE ENCASHMENT XXXX EXEMPTION

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RETRENCHMENT COMPENSATION U/S10(10B)

Amount actually received xxxxLESS: EXEMPTION (least of the following)1. Amount received2. Notified limit of Rs.5lakh. 4. Amount determined under the Industrial Disputes Act, 1947 (xxx)

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VOLUNTARY RETIREMENT COMPENSATION U/S10(10C)

Amount actually received xxxxLESS: EXEMPTION (least of the following)1. Amount received2. Notified limit of Rs.5lakh. 4. Amount should not exceed higher of the following: a) last drawn salary *3* completed yr of service b) last drawn salary *no. of years of service (xxx)

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COMPUTATION OF SALARY VOLUNTARY RETIREMENT COMPENSATION

BASIC SALARY XXXX DA CONSIDERED

FOR RETIREMENT BENEFITS XXXX

SALARY FOR VLC EXEMPTION XXXX

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TAX TREATMENT OF PROVIDENT FUNDS S.NO. STATUTORY

PROVIDENT FUNDRECOGNISED PROVIDENT FUND

UNRECOGNISED PROVIDENT FUND

PUBLIC PROVIDENT FUND

1. CONTRIBUTION BY EMPLOYER & EMPLOYEE

BY EMPLOYER & EMPLOYEE

BY EMPLOYER & EMPLOYEE

BY ALL ASSESSES INDEPENDENTLY

2. CLAIM OF DEDUCTION 80C 80C NO TAX BENEFIT 80C

3. EMPLOYERS CONTRIBUTION

NOT TAXABLE AMOUNT EXCEEDING 12% OF SALARY IS TAXABLE

NOT TAXABLE NOT APPLICABLE

4. INTEREST CREDITED FULLY EXEMPT EXEMPT UPTO 9.5%

EMPLOYEES CONTRIBUTION TAXABLE UNDER IFOS,

FULLY EXEMPT

5. WITHDRAWAL EXEMPT EXEMPT EMPLOYERS CONTRIBUTION AND INTEREST THEREON IS TAXABLE AS PROFITS IN LIEU OF SALARY .

EXEMPT

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