Salaries

Certain professionals and government employees receive special allowances that are fully or partially exempt from tax under specific sections of the Income Tax Act. Here’s a detailed breakdown: 1. Government & Défense Personnel (A) Armed Forces Allowances (Fully Exempt) ALLOWANCE EXEMPTION CONDITIONS Border Area Allowance Full exemption Posted in specified border areas High Altitude Allowance ₹3,000-25,000/month Based […]

Here’s a detailed breakdown of fully taxable allowances for the computation of salary income in India, based on the latest tax rules (FY 2024-25/AY 2025-26): Fully Taxable Allowances These allowances are entirely added to your taxable salary income and do not qualify for any exemptions: Dearness Allowance (DA) Paid to offset inflation and cost-of-living adjustments. Fully taxable

Perquisites under Section 17(2) of the Income Tax Act, 1961, are additional benefits or amenities provided by an employer to an employee, over and above their salary or wages. These perquisites form part of “Income under the head Salaries” and are taxable unless specifically exempted. Below is a detailed breakdown of perquisites, their taxability, valuation rules, and recent updates

Under Section 17(2) of the Income Tax Act, 1961, certain perquisites are taxable for all employees, regardless of their designation or salary level. Below is a detailed breakdown of these universally taxable perquisites, along with their valuation rules and examples: 1. Rent-Free or Concessional Accommodation Taxable Value: For non-government employees: 15% of salary(cities with population >25 lakh) 10% of

Under Section 17(2) of the Income Tax Act, 1961, certain perquisites are taxable only for “specified employees”, while they remain exempt for others. Below is a detailed breakdown of these perquisites, the criteria for “specified employees,” and their valuation rules (as per FY 2024-25/AY 2025-26): 1. Who is a “Specified Employee”? An employee is classified as “specified” if they meet any of the

Here’s a detailed breakdown of tax-free perquisites applicable to all employees under the Income Tax Act, 1961 (as of FY 2024-25/AY 2025-26). These benefits are exempt from tax regardless of the employee’s designation or salary level: 1. Medical Benefits Employer-run medical facilities: Treatment at hospitals/dispensaries maintained by the employer for employees or their families is fully exempt . Reimbursements: Up to ₹15,000/yearfor medical expenses

Under the Income Tax Act, 1961, rent-free or concessional accommodation provided by an employer is a taxable perquisite for employees. The valuation depends on whether the employee is in the private sector, government sector, or a specified employee. 1. Taxability & Valuation Rules (A) For Private Sector Employees (Non-Government) The taxable value is calculated as: 15% of salary(for cities

When an employer provides accommodation in a hotel, guest house, or similar facility, its taxability depends on: Duration of stay Purpose of stay (official vs. personal) Nature of employment (transfer, project, etc.) 1. When Hotel Accommodation is Taxable (A) For Non-Government Employees (Private Sector) Fully Taxableif the stay is for personal reasons (e.g., vacation, non-work-related stay). Taxable Value

The following benefits are taxable for all employees, irrespective of their salary or designation. These must be reported in Form 16 and included in taxable salary income. 1. Rent-Free/Concessional Accommodation Taxable Value: Private Employees:5%–15% of salary (based on city population). Employees:License fee minus rent paid. Furnished Accommodation:Additional 10% of furniture cost or actual hire charges. 2. Interest-Free/Concessional Loans

Here’s a detailed breakdown of the valuation of motor car perquisites under Rule 3(2) of the Income Tax Act, along with examples in a table format: Valuation of Motor Car Perquisites [Rule 3(2)] Perquisites related to motor vehicles are taxable under Section 17(2) of the Income Tax Act. The valuation depends on: Ownership(employer or employee-owned). Usage(official, personal, or mixed).