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ListofbenefitsavailabletoSalariedPersons
[AY201718]
S. Section Particulars Benefits
N.
A. Allowances
1. 10(13A) House Rent Allowance (Sec. Leastofthefollowingisexempt:
10(13A)&Rule2A) a)ActualHRAReceived
b) 40% of Salary (50%, if house situated in
Mumbai,Calcutta,DelhiorMadras)
c)Rentpaidminus10%ofsalary
* Salary= Basic + DA (if part of retirement
benefit)+TurnoverbasedCommission
Note:
i. Fully Taxable, if HRA is received by an
employeewhoislivinginhisownhouseor
ifhedoesnotpayanyrent
ii.ItismandatoryforemployeetoreportPAN
ofthelandlordtotheemployerifrentpaid
ismorethanRs.1,00,000[CircularNo.08
/2013dated10thOctober,2013].
2. 10(14) ChildrenEducationAllowance Up to Rs. 100 per month per child up to a
maximumof2childrenisexempt
3. 10(14) HostelExpenditureAllowance Up to Rs. 300 per month per child up to a
maximumof2childrenisexempt
4. 10(14) Transport Allowance granted to an UptoRs.1,600permonth(Rs.3,200permonth
employee to meet expenditure on forblindandhandicappedemployees)isexempt
commuting between place of
residenceandplaceofduty
5. Sec. Transport Allowance to an Amount of exemption shall be lower of
10(14) employee working in any transport following:
business to meet his personal a)70%ofsuchallowanceor
expenditure during his duty b)Rs.10,000permonth.
performed in the course of running
of such transport from one place to
another place provided employee is
notinreceiptofdailyallowance.
6. 10(14) Conveyance Allowance granted to Exempttotheextentofexpenditureincurred
meettheexpenditureonconveyance
inperformanceofdutiesofanoffice
7. 10(14) AnyAllowancegranted to meet the Exempttotheextentofexpenditureincurred
costoftravelontourorontransfer

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8. 10(14) Daily Allowance to meet the Exempttotheextentofexpenditureincurred

ordinary daily charges incurred by
an employee on account of absence
fromhisnormalplaceofduty
9. 10(14) Helper/AssistantAllowance Exempttotheextentofexpenditureincurred
10. 10(14) Research Allowance granted for Exempttotheextentofexpenditureincurred
encouraging the academic research
andotherprofessionalpursuits
11. 10(14) UniformAllowance Exempttotheextentofexpenditureincurred
12. 10(7) Foreign allowances or perquisites FullyExempt
paid or allowed by Government to
its employees (an Indian citizen)
postedoutsideIndia
13. Allowances to Judges of High FullyExempt.
Court/Supreme Court (Subject to
certainconditions)
14. 10(45) Following allowances and FullyExempt
perquisites given to serving
Chairman/Member of UPSC is
exemptfromtax:
a) Value of rent free official
residence
b) Value of conveyance facilities
includingtransportallowance
c)Sumptuaryallowance
d)Leavetravelconcession
15. Allowances paid by the UNO to its FullyExempt
employees
16. 10(45) Allowances to Retired Exempt subject to maximum of Rs.14,000 per
Chairman/Members of UPSC monthfordefrayingservicesofanorderlyandfor
(Subjecttocertainconditions) secretarialassistantoncontractbasis.
Thevalueofresidentialtelephonefreeofcostand
thenumberoffreecallstotheextentof1500per
monthshallbeexempt.
17. Sec. Special compensatory Allowance AmountexemptfromtaxvariesfromRs.300per
10(14) (Hilly Areas) (Subject to certain monthtoRs.7,000permonth.
conditionsandlocations)
18. Sec. Border area allowances, Remote AmountexemptfromtaxvariesfromRs.200per
10(14) Locality allowance or Disturbed monthtoRs.1,300permonth.
Area allowance or Difficult Area
Allowance (Subject to certain
conditionsandlocations)
19. Sec. Tribal area allowance given in (a) Rs.200permonth
10(14) MadhyaPradesh(b)TamilNadu(c)
Uttar Pradesh (d) Karnataka (e)
Tripura (f) Assam (g) West Bengal
(h)Bihar(i)Orissa
20. Sec. Compensatory Field Area Rs.2,600permonth
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10(14) Allowance. If this exemption is

taken, employee cannot claim any
exemption in respect of border area
allowance (Subject to certain
conditionsandlocations)
21. Sec. Compensatory Modified Area Rs.1,000permonth
10(14) Allowance. If this exemption is
taken, employee cannot claim any
exemption in respect of border area
allowance (Subject to certain
conditionsandlocations)
22. Sec. Counter Insurgency Allowance Rs.3,900permonth
10(14) granted to members of Armed
Forcesoperatinginareasawayfrom
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)
23. Sec. Underground Allowance is granted UptoRs.800permonth
10(14) to employees working in
uncongenial, unnatural climate in
undergroundmines
24. Sec. High Altitude Allowance is granted a) Up to Rs. 1,060 per month (for altitude of
10(14) to armed forces operating in high 9,000to15,000feet)
altitude areas (Subject to certain b)UptoRs.1,600permonth(foraltitudeabove
conditionsandlocations) 15,000feet)
25. Sec. Highly active field area allowance UptoRs.4,200permonth
10(14) grantedtomembersofarmedforces
(Subject to certain conditions and
locations)
26. Sec. Island Duty Allowance granted to UptoRs.3,250permonth
10(14) members of armed forces in
Andaman and Nicobar and
Lakshadweep group of Island
(Subject to certain conditions and
locations)
B. Perquisites
1. 17(2)(i) Rent free unfurnished LicenseFeesdeterminedinaccordancewithrules
readwith accommodation provided to Central framed by Government for allotment of houses
andStateGovernmentemployees shall be deemed to be the taxable value of
Rule3(1)
perquisites.
2. 17(2) Unfurnished rent free Taxablevalueofperquisites
(i)/(ii) accommodation provided to other A.IfHousePropertyisownedbytheemployer:
readwith employees i. 15% of salary, if population of city where
Rule3(1) accommodation is provided exceeds 25
lakhsasper2001census
ii. 10% of salary, if population of city where
accommodation is provided exceeds 10
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lakhs but does not exceed 25 lakhs as per

2001census
iii. 7.5% of salary, if accommodation is
providedinanyothercity
B.IfHousePropertyistakenonleaseorrentby
theemployer,theperquisitevalueshallbe:
i. Lease rent paid or payable by the employer or
15%ofthesalary,whicheverislower
*Salaryincludes:
a)BasicPay
b) Dearness Allowance (only to the extent it
formspartofretirementbenefitsalary)
c)Bonus
d)Commission
e)Allotherallowances(onlytaxableportion)
f) Any monetary payment which is chargeable
totax
Butdoesnotinclude
i.Valueofanyperquisite[undersection17(2)]
ii.EmployerscontributiontoPF
iii. Benefits received at the time of retirement
likegratuity,pensionetc.
Note:
1) Rent free accommodation is not chargeable
to tax if provided to an employee working
atminingsiteoranonshoreoilexploration
site,etc.,
(i) which is being of temporary nature
(subjecttoconditions)
(ii)whichislocatedinremotearea.
2)RentfreeaccommodationifprovidedtoHigh
Court or Supreme Court Judges, Union
Ministers, Leader of Opposition in
Parliament, an official in Parliament and
ServingChairmanandmembersofUPSCis
TaxFreePerquisites.
3)Thevaluesodeterminedshallbereducedby
the amount of rent, if any, paid by the
employee.
4)Ifemployeeistransferredandretainproperty
at both the places, the taxable value of
perquisitesforinitialperiodof90daysshall
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
toboththeaccommodations.
3. 17(2)(i) Rentfreefurnishedaccommodation Taxablevalueofperquisites
readwith a) Find out taxable value of perquisite assuming
Rule3(1) accommodationtobeprovidedtotheemployeeis
unfurnished
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b) Add: 10% of original cost of furniture and

fixtures (if these are owned by the employer) or
actualhigherchargespaidorpayable(iftheseare
takenonrentbytheemployer).
Note: The value so determined shall be reduced
by the amount of rent, if any, paid by the
employee
4. 17(2)(i) A furnished accommodation in a Taxablevalueofperquisites
readwith Hotel Valueofperquisiteshallbeloweroffollowing:
Rule3(1) a) Actual charges paid or payable by the
employertosuchhotel
b)24%ofsalary
Note: Hotel accommodation will not be
chargeabletotaxif:
a)Itisprovidedforatotalperiodnotexceeding
in aggregate 15 days in the financial year
and
b)Suchaccommodationinhotelisprovidedon
employees transfer from one place to
anotherplace.
5. 17(2)(iii) MotorCar/OtherConveyance Taxablevalueofperquisites(SeeNote1below)
read with
Rule3(2)
6. 17(2)(iii) Services of a domestic servant Taxablevalueofperquisiteshallbesalarypaidor
read with including sweeper, gardener, payable by the employer for such services less
Rule3(3) watchmenorpersonalattendant anyamountrecoveredfromtheemployee.
(Taxable in case of specified
employeeonly[SeeNote4])
7. 17(2)(iii) Supply of gas, electricity or water Taxablevalueofperquisites:
read with forhouseholdpurposes 1. Manufacturing cost per unit incurred by the
Rule3(4) employer., if provided from resources
ownedbytheemployer
2. Amount paid by the employer, if purchased
bytheemployerfromoutsideagency
Note:
i. Any amount recovered from the employee
shallbedeductedfromthetaxablevalueof
perquisite.
ii.Taxableincaseofspecifiedemployeesonly
[Seenote4]
8. 17(2)(iii) EducationFacilities Taxablevalueofperquisites(SeeNote2below)
read with
Rule3(5)
9. 17(2)(iii) Transport facilities provided by the Value at which services are offered by the
read with employer engaged in carriage of employer to the public less amount recovered
Rule3(6) passengerorgoods(exceptAirlines fromtheemployeeshallbeataxableperquisite
orRailways)
(Taxable in case of specified
employeeonly[SeeNote4])

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10. 17(2)(v) Amountpayablebytheemployerto FullyTaxable

effect an insurance on life of
employee or to effect a contract for
anannuity
11. 17(2)(vi) ESOP/SweatEquityShares Taxablevalueofperquisites
read with Fair Market value of shares or securities on the
Rule3(8) 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.
FairMarketValueshallbedeterminedasfollows:
a)IncaseoflistedShares:Averageofopening
and closing price as on date of exercise of
option (Subject to certain conditions and
circumstances)
b)Incaseofunlistedshares/securityotherthan
equity shares: Value determined by a
Merchant Banker as on date of exercise of
option or an earlier date, not being a date
whichismorethan180daysearlierthanthe
dateofexerciseoftheoption.
12. 17(2)(vii) Employers contribution towards Taxable in the hands of employee to the extent
superannuationfund suchcontributionexceedRs.1,50,000
13. 17(2) Interest free loan or Loan at Interest free loan or loan at concessional rate of
(viii) read concessionalrateofinterest interestgivenbyanemployertotheemployee(or
with Rule any member of his household) is a perquisite
3(7)(i) chargeabletotaxinthehandsofallemployeeson
followingbasis:
1.Findoutthemaximumoutstandingmonthly
balance (i.e. the aggregate outstanding
balance for each loan as on the last day of
eachmonth)
2.FindoutrateofinterestchargedbytheSBI
asonthefirstdayofrelevantpreviousyear
in respect of loan for the same purpose
advancedbyit
3. Calculate interest for each month of the
previous year on the outstanding amount
(mentionedinpoint1)attherateofinterest
(giveninpoint2)
4. Interest actually recovered, if any, from
employee
5. The balance amount (point 3point 4) is
taxablevalueofperquisite
Nothingistaxableif:
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,exemptionisnotapplicabletoso
muchoftheloanashasbeenreimbursedto
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the employee under any medical insurance

scheme.
14. 17(2) Facility of travelling, touring and a) Perquisite value taxable in the hands of
(viii) read accommodation availed of by the employee shall be expenditure incurred by
with Rule employee or any member of his the employer less amount recovered from
3(7)(ii) householdforanyholiday employee.
b) Where such facility is maintained by the
employer,andisnotavailableuniformlyto
allemployees,thevalueofbenefitshallbe
takentobethevalueatwhichsuchfacilities
are offered by other agencies to the public
lessamountrecoveredfromemployee.
15. 17(2) Freefoodandbeveragesprovidedto 1)FullyTaxable:FreemealsinexcessofRs.50
(viii) read theemployee permeallessamountpaidbytheemployee
with Rule shallbeataxableperquisite
3(7)(iii) 2)Exemptfromtax:Followingfreemealsshall
beexemptfromtax
a) Food and nonalcoholic beverages
provided during working hours in
remote area or in an offshore
installation
b) Tea, Coffee or NonAlcoholic
beverages and Snacks during
working hours are tax free
perquisites
c) Food in office premises or through
nontransferable paid vouchers
usableonlyateatingjointsprovided
byanemployerisnottaxable,ifcost
totheemployerisRs.50(orless)per
meal.
16. 17(2) Gift or Voucher or Coupon on a)Giftsincashorconvertibleintomoney(like
(viii) read ceremonial occasions or otherwise giftcheque)arefullytaxable
with Rule providedtotheemployee b)GiftinkinduptoRs.5,000inaggregateper
3(7)(iv) annum would be exempt, beyond which it
wouldbetaxable.
17. 17(2) CreditCard a) Expenditure incurred by the employer in
(viii) read respectofcreditcardusedbytheemployee
with Rule or any member of his household less
3(7)(v) amount recovered from the employee is a
taxableperquisite
b)Expensesincurredforofficialpurposesshall
not be a taxable perquisite provided
complete details in respect of such
expenditurearemaintainedbytheemployer
18. 17(2) FreeRecreation/ClubFacilities a) Expenditure incurred by the employer
(viii) read towards annual or periodical fee etc.
with Rule (excluding initial fee to acquire corporate
3(7)(vi) membership) less amount recovered from
theemployeeisataxableperquisite
b) Expenses incurred on club facilities for the
officialpurposesareexemptfromtax.
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c) Use of health club, sports and similar

facilities provided uniformly to all
employeesshallbeexemptfromtax.
19. 17(2) Use of movable assets of the Taxablevalueofperquisites
(viii) read employer by the employee is a a)UseofLaptopsandComputers:Nil
with Rule taxableperquisite
b)MovableassetotherthanLaptops,computers
3(7)(vii)
andMotorCar*:10%oforiginalcostofthe
asset(ifassetisownedbytheemployer)or
actual higher charges incurred by the
employer (if asset is taken on rent) less
amountrecoveredfromemployee.
*See Note 1 for computation of perquisite value
incaseofuseoftheMotorCar
20. 17(2) Transfer of movable assets by an Taxablevalueofperquisites
(viii) read employertoitsemployee a) Computers, Laptop and Electronics items:
with Rule Actual cost of asset less depreciation at
3(7)(viii) 50% (using reducing balance method) for
each completed year of usage by employer
lessamountrecoveredfromtheemployee
b) Motor Car: Actual cost of asset less
depreciation at 20% (using reducing
balancemethod)foreachcompletedyearof
usage by employer less amount recovered
fromtheemployee
c) Other movable assets: Actual cost of asset
lessdepreciationat10%(onSLMbasis)for
each completed year of usage by employer
lessamountrecoveredfromtheemployee.
21. 17(2) Any other benefit or amenity Taxablevalueofperquisiteshallbecomputedon
(viii) read extendedbyemployertoemployee thebasisofcosttotheemployer(underanarms
with Rule length transaction) less amount recovered from
3(7)(ix) theemployee.
However expenses on telephones including a
mobilephoneincurredbytheemployeronbehalf
of employee shall not be treated as taxable
perquisite.
22. 10(10CC) Tax paid by the employer on Fullyexempt
perquisites(notprovidedforbyway
of monetary payments) given to
employee
23. 10(5) Leave Travel Concession or The exemption shall be limited to fare for going
Assistance (LTC/LTA), extended by anywhere in India along with family twice in a
an employer to an employee for blockoffouryears:
goinganywhereinIndia along with i. Exemption limit where journey is performed
hisfamily* by Air Air fare of economy class in the
*Family includes spouse, children NationalCarrierbytheshortestrouteorthe
anddependentbrother/sister/parents. amountspent,whicheverisless
However, family doesnt include ii.Exemptionlimitwherejourneyisperformed
more than 2 children of an byRailAirconditionedfirstclassrailfare
Individual born on or after 0110 by the shortest route or the amount spent,
1998. whicheverisless

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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 Airconditioned
first class rail fare by the shortest route or
theamountspent,whicheverisless
iv. Exemption limit where the places of origin
of journey and destination are not
connectedbyrail:
a. Where a recognized public transport
systemexistsFirstClassordeluxe
classfarebytheshortestrouteorthe
amountspent,whicheverisless
b. Where no recognized public transport
system exists Air conditioned first
classrailfarebyshortestrouteorthe
amountspent,whicheverisless
Notes:
i.Twojourneysinablockof4calendaryearsis
exempt
ii.TaxableonlyincaseofSpecifiedEmployees
[Seenote4]
24. Provisoto MedicalfacilitiesinIndia 1) Expense incurred or reimbursed by the
section employer for the medical treatment of the
17(2) 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)Hospitalmaintainedbytheemployer.
b) Hospital maintained by the
Government or Local Authority or
any other hospital approved by
CentralGovernment
c) Hospital approved by the Chief
Commissioner having regard to the
prescribed guidelines for treatment
oftheprescribeddiseases.
2) Medical insurance premium paid or
reimbursed by the employer is not
chargeabletotax.
3) Any other expenditure incurred or
reimbursed by the employer for providing
medicalfacilityinIndiaisnotchargeableto
tax up to Rs. 15,000 in aggregate per
assessmentyear.
25. Provisoto MedicalfacilitiesoutsideIndia Any expenditure incurred or reimbursed by the
section employer for medical treatment of the employee
17(2) or his family member outside India is exempt to
the extent of following (subject to certain
condition):
a) Expenses on medical treatment exempt to
theextentpermittedbyRBI.

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b)Expensesonstayabroadforpatientandone
attendant exempt to the extent permitted
byRBI.
c)Costontraveloftheemployeeoranyfamily
or one attendant exempt, if Gross Total
Income (before including the travel
expenditure) of the employee, does not
exceedRs.2,00,000.
C. Deductionfromsalary
1. 16(ii) EntertainmentAllowancereceived Leastofthefollowingisdeductible:
bytheGovernmentemployees a)Rs5,000
(Fullytaxableincaseofother
b) 1/5th of salary (excluding any allowance,
employees)
benefitsorotherperquisite)
c)Actualentertainmentallowancereceived
2. 16(iii) EmploymentTax/ProfessionalTax. Amount actually paid during the year is
deductible. However, if professional tax is paid
bytheemployeronbehalfofitsemployeethanit
isfirstincludedinthesalaryoftheemployeeasa
perquisite and then same amount is allowed as
deduction.
D. RetirementBenefits
a)LeaveEncashment
1. 10(10AA) Encashment of unutilized earned FullyExempt
leave at the time of retirement of
Governmentemployees
2. 10(10AA) Encashment of unutilized earned Leastofthefollowingshallbeexemptfromtax:
leave at the time of retirement of a)Amountactuallyreceived
other employees (not being a
b)Unutilizedearnedleave*XAveragemonthly
Governmentemployee)
salary
c)10monthsAverageSalary**
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
**Averagesalary=AverageSalary***oflast10
monthsimmediatelyprecedingtheretirement
***Salary=BasicPay+DearnessAllowance(to
the extent it forms part of retirement benefits)+
turnoverbasedcommission
b)RetrenchmentCompensation
1. 10(10B) Retrenchment Compensation Leastofthefollowingshallbeexemptfromtax:
received by a workman under the a)anamountcalculatedaspersection25F(b)of
IndustrialDisputeAct,1947(Subject theIndustrialDisputesAct,1947
tocertainconditions).
b)Rs.5,00,000or
c)Amountactuallyreceived
Note:
i.ReliefunderSection89(1)isavailable
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ii.15daysaveragepayforeachcompletedyear
ofcontinuousserviceoranypartthereofin
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 FullyExempt
Employees (Other than employees
ofstatutorycorporations)
2. 10(10)(ii) Death cumRetirement Gratuity Leastoffollowingamountisexemptfromtax:
received by other employees who 1.(*15/26)XLastdrawnsalary**Xcompleted
are covered under Gratuity Act, yearofserviceorpartthereofinexcessof6
1972 (other than Government months.
employee) (Subject to certain
2.Rs.10,00,000
conditions).
3.Gratuityactuallyreceived.
*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) Death cumRetirement Gratuity Leastoffollowingamountisexemptfromtax:
(iii) received by other employees who 1. Half months Average Salary* X Completed
are notcoveredunder Gratuity Act, yearsofservice
1972 (other than Government
2.Rs.10,00,000
employee) (Subject to certain
conditions). 3.Gratuityactuallyreceived.
*Average salary = Average Salary of last 10
months immediately preceding the month of
retirement
**Salary=BasicPay+DearnessAllowance(to
the extent it forms part of retirement benefits)+
turnoverbasedcommission
d)Pension
1. Pension received from United FullyExempt
Nation Organization by the
employeeofhisfamilymembers
2. 10(10A) Commuted Pension received by an FullyExempt
(i) employee Central Government,
State Government, Local Authority
Employees and Statutory
Corporation
3. 10(10A) Commuted Pension received by 1/3 of full value of commuted pension will be
(ii) other employees who also receive exemptfromtax
gratuity
4. 10(10A) Commuted Pension received by 1/2 of full value of commuted pension will be
(iii) otheremployeeswhodonotreceive exemptfromtax
anygratuity
5. 10(19) Family Pension received by the FullyExempt
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familymembersofArmedForces
6. 57(iia) Family pension received by family 33.33% of Family Pension subject to maximum
membersinanyothercase ofRs.15,000shallbeexemptfromtax
e)VoluntaryRetirement
1. 10(10C) Amount received on Voluntary Leastofthefollowingisexemptfromtax:
Retirement or Voluntary Separation 1) Actual amount received as per the guidelines
(Subjecttocertainconditions) i.e.leastofthefollowing
a) 3 months salary for each completed year of
services
b) Salary at the time of retirement X No. of
monthsofservicesleftforretirementor
2)Rs.5,00,000
f)ProvidentFund
1. EmployeesProvidentFund For taxability of contribution made to various
employees provident fund and interest arising
thereonseeNote3.

g)NationalPensionSystem(NPS)

1. 10(12A) NationalPensionSystem Any payment from the National Pension System

Trusttoanemployeeonclosureofhisaccountor
onhisoptingoutofthepensionschemereferred
to in section 80CCD, to the extent it does not
exceed40%ofthetotalamountpayabletohimat
the time of such closure or his opting out of the
scheme.
E. ArrearofSalaryandreliefundersection89(1)
1. 15 Arrearofsalaryandadvancesalary Taxable in the year of receipt. However relief
undersection89isavailable
2. 89 ReliefunderSection89 Ifanindividualreceivesanyportionofhissalary
inarrearsorinadvanceorreceivesprofitsinlieu
ofsalary,hecanclaimreliefasperprovisionsof
section89readwithrule21A
F. OtherBenefits
1. Lumpsum payment made Fully Exempt in the hands of widow or other
gratuitously or by way of legalheirsofemployee
compensation or otherwise to
widow or other legal heirs of an
employee who dies while still in
active service [Circular No. 573,
dated21081990]
2. Exgratia payment to a person (or Fully Exempt in the hands of individual or legal
legal heirs) by Central or State heirs
Government, Local Authority or
Public Sector Undertaking
consequent upon injury to the
person or death of family member
while on duty [Circular No. 776,
dated08061999]

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3. SalaryreceivedfromUnitedNation FullyExempt
Organization [Circular No. 293,
dated10021981]
4. 10(6)(ii) Salary received by foreign national Fully Exempt if corresponding official in that
as an officials of an embassy, high foreigncountryenjoysasimilarexemption
commission, legation, consulate or
trade representation of a foreign
state
5. 10(6)(vi) Remuneration received by non Fullyexempt
resident foreign citizen as an
employeeofaforeignenterprisefor
servicesrenderedinIndia,if:
a) Foreign enterprise is not
engaged in any trade or
businessinIndia
b) His stay in India does not
exceed in aggregate a period
of 90 days in such previous
year
c) Suchremuneration is not liable
to deducted from the income
of employer chargeable under
thisAct
6. 10(6) Salary received by a nonresident Fullyexempt
(viii) foreign national for services
rendered in connection with his
employmentonaforeignshipifhis
total stay in India does not exceed
90daysinthepreviousyear.
7. Salaryandallowancesreceivedbya FullyExempt
teacher /professor from SAARC
member state (Subject to certain
conditions).

Notes:
1.MotorCar(taxableonlyincaseofspecifiedemployees[Seenote4])exceptwhencarownedbythe
employee is used by him or members of his household wholly for personal purposes and for which
reimbursementismadebytheemployer)
S. Circumstances EngineCapacityupto1600cc EngineCapacityabove1600
No. (valueofperquisite) cc(valueofperquisite)
1 MotorCarisownedorhiredbytheemployer
1.1 Wheremaintenancesandrunningexpensesincludingremunerationofthechauffeuraremetor
reimbursedbytheemployer.
1.1A If car is used wholly and Fully exempt subject to Fully exempt subject to
exclusively in the maintenance of specified maintenance of specified
performance of official documents documents
duties.
1.1B If carisusedexclusively for Actual amount of expenditure incurred by the employer on the
the personal purposes of the running and maintenance of motor car including remuneration
employee or any member of paid by the employer to the chauffeur and increased by the
hishousehold. amount representing normal wear and tear of the motor car at
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10%p.a.ofthecostofvehiclelessanyamountchargedfromthe
employeeforsuchuseistaxable
1.1C The motor car is used partly Rs. 1,800 per month (plus Rs. Rs. 2,400 per month (plus Rs.
in the performance of duties 900 per month, if chauffeur is 900 per month, if chauffeur is
and partly for personal also provided to run the motor also provided to run the motor
purposes of the employee or car) car)
any member of his
household. Nothing is deductible in respect of any amount recovered from
theemployee.
1.2 Wheremaintenancesandrunningexpensesaremetbytheemployee.
1.2A If car is used wholly and Not a perquisite, hence, not Not a perquisite, hence, not
exclusively in the taxable taxable
performance of official
duties.
1.2B If carisusedexclusively for Expenditureincurredbytheemployer(i.e.hirecharges,ifcaris
the personal purposes of the onrentornormalwearandtearat10%ofactualcostofthecar)
employee or any member of plussalaryofchauffeurifpaidorpayablebytheemployerminus
hishousehold amountrecoveredfromtheemployee.
1.2C The motor car is used partly Rs.600permonth(plusRs.900 Rs.900permonth(plusRs.900
in the performance of duties per month, if chauffeur is also per month, if chauffeur is also
and partly for personal providedtorunthemotorcar) providedtorunthemotorcar)
purposes of the employee or
anymemberofhishousehold Nothing is deductible in respect of any amount recovered from
theemployee.
2 MotorCarisownedbytheemployee
2.1 Wheremaintenancesandrunningexpensesincludingremunerationofthechauffeuraremetor
reimbursedbytheemployer.
2.1A Thereimbursementisforthe Fully exempt subject to Fully exempt subject to
useofthevehiclewhollyand maintenance of specified maintenance of specified
exclusively for official documents documents
purposes
2.1B Thereimbursementisforthe Actual expenditure incurred by the employer minus amount
useofthevehicleexclusively recoveredfromtheemployee
for the personal purposes of
theemployeeoranymember
ofhishousehold
2.1C Thereimbursementisforthe Actual expenditure incurred by Actual expenditure incurred by
use of the vehicle partly for the employer minus Rs. 1800 the employer minus Rs. 2400
official purposes and partly per month and Rs. 900 per per month and Rs. 900 per
for personal purposes of the month if chauffer is also month if chauffer is also
employee or any member of provided minus amount provided minus amount
hishousehold. recoveredfromemployee. recoveredfromemployee.
3 Where the employee owns any other automotive conveyance and actual running and
maintenancechargesaremetorreimbursedbytheemployer
3.1 Reimbursement for the use Fully exempt subject to Fully exempt subject to
of the vehicle wholly and maintenance of specified maintenance of specified
exclusively for official documents documents
purposes
3.2 Reimbursement for the use Actual expenditure incurred by NotApplicable
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of vehicle partly for official theemployerminusRs.900per

purposes and partly for monthminusamountrecovered
personal purposes of the fromemployee
employee.

2.EducationalFacilities
Taxableonlyinthehandsofspecifiedemployees[Seenote4]
Facility Valueofperquisite
extended
to Providedintheschoolownedbytheemployer Providedinanyotherschool

Children Cost of such education in similar school less Rs. Amount incurred less amount
1,000permonthperchild(irrespectiveofnumbers recovered from employee (an
ofchildren)lessamountrecoveredfromemployee exemption of Rs. 1,000 per month per
childisallowed)
Other Cost of such education in similar school less Costofsucheducationincurred
family amountrecoveredfromemployee
member

2.1OtherEducationalFacilities
Particulars Taxable Value of
Perquisites
Reimbursement of school fees of children or family member of Fullytaxable
employees
Freeeducationalfacilities/trainingofemployees Fullyexempt
3.EmployeesProvidentFund
Tax treatment in respect of contributions made to and payment from various provident funds are
summarizedinthetablegivenbelow:
Particulars Statutory Recognized provident Unrecognized Public
provident fund providentfund provident
fund fund
Employers contribution to Fully Exempt only to the extent FullyExempt
providentfund Exempt of12%ofsalary*
Deduction under section Available Available NotAvailable Available
80C on employees
contribution
Interestcreditedtoprovident Fully Exempt only to the extent FullyExempt Fully
fund Exempt rate of interest does not Exempt
exceed9.5%
Paymentreceivedatthetime Fully Fully Exempt (Subject to Fully Taxable Fully
of retirement or termination Exempt certain conditions and (except employees Exempt
ofservice circumstances) contribution)
*Salary=BasicPay+DearnessAllowance(totheextentitformspartofretirementbenefits)+turnover
basedcommission
Payment from recognized provident fund shall be exempt in the hands of employees in following
circumstances:
a)Ifemployeehasrenderedcontinueservicewithhisemployer(includingpreviousemployer,whenPF
accountistransferredtocurrentemployer)foraperiodof5yearsormore

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b)Ifemployeehasbeenterminatedbecauseofcertainreasonswhicharebeyondhiscontrol(illhealth,
discontinuationofbusinessofemployer,etc.)
4.SpecifiedEmployee
Thefollowingemployeesaredeemedasspecifiedemployees:
1)Adirectoremployee
2) An employee who has substantial interest (i.e. beneficial owner of equity shares carrying 20% or
morevotingpower)intheemployercompany
3)Anemployeewhosemonetaryincome*underthesalaryexceedsRs.50,000
*MonetaryIncomemeansIncomechargeableunderthesalarybutexcludingperquisitevalueofallnon
monetaryperquisites


[AsamendedbyFinanceAct,2016]

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