Tuesday, 11 December 2012

Exemptions from Salary Income u/s. 10 of the Income Tax Act.

Section 10 of the I.T.Act provides for certain categories of payments to be exempt from taxation, either wholly or partly.  Such payments are not to be included under the head ‘salary’ for computing the tax deductible. Some of these are listed below and are discussed in detail in Chapter-5 of this booklet.

Death cum retirement gratuity or any other gratuity: Exempt to the extent specified u/s 10(10).
Commutation of pension:  Exempt to the extent as provided in Sec 10(10A)
Leave encashment:  Exempt to the extent provided in Sec 10(AA).
Retrenchment Compensation:  Exempt to the extent provided by Section 10(10B).
Compensation on voluntary retirement:  Exempt to the extent provided by Sec 10(10C)
Payment from provident fund:  Exempt to the extent provided in Sec. 10(11) & Sec 10(12).
Payment from approved superannuation fund:  Exempt under Section 10(13).
Interest income & investments:  As provided u/s 10(15).
Exemption of pension/family pension to awardees of PVC, MVC and VC: Clause (18) of section 10 provides for exemption of any income by way of pension received by an individual or family pension received by any member of the family of an individual who has been in the service of the Central Government or State Government and has been awarded “Param Vir Chakra” or “Maha Vir Chakra” or “Vir Chakra” or such other gallantry award as may be specifically notified by the Central Government

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