Section 17 of the Income-tax Act defines the term ‘salary’. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary.
Are retirement benefits like PF and Gratuity taxable?
In the hands of a Government employee Gratuity and PF receipts on retirement are exempt from tax. In the hands of non-Government employee, gratuity is exempt subject to the limits prescribed in this regard and PF receipts are exempt from tax, if the same are received from a recognised PF after rendering continuous service of […]
When relief under section 89 of the Income Tax Act is available?
Relief under section 89 is available to an individual if he has received Salary or family pension in arrears or in advance [Rule 21A (2)] Gratuity in excess of exemption under section 10(10)(ii)/(iii) [Rule 21A(3)] Compensation on termination of employment [Rule 21A(4)] Commuted pension in excess of exemption under section 10(10A)(i) [ Rule 21A(5)] In […]
What are allowances?
Allowances are fixed periodic amounts, apart from salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee. E.g., Tiffin allowance, transport allowance, uniform allowance, etc. There are generally three types of allowances for the purpose of the Income-tax Act – taxable allowances, fully exempted allowances and partially […]
Are receipts from life insurance policies on maturity along with bonus taxable?
As per section 10(10D), any amount received under a life insurance policy, including bonus is exempt from tax. However, following receipts would be subject to tax: Any sum received under sub-section (3) of section 80DD; or Any sum received under Keyman insurance policy; or Any sum received in respect of policies issued on or after […]