List of benefits available to Salaried Persons

[AY 2021-22]
S. Sectio Particulars Benefits
N. n
A. Allowances
1. 10(13 House Rent Allowance (Sec. 10(13A) & Rule 2A) Least of the following is exempt:
A) a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or M
adras)
c) Rent paid minus 10% of salary
* Salary= Basic + DA (if part of retirement benefit) + Turnover based Com
mission
Note:
i. Fully Taxable, if HRA is received by an employee who is living in his
own house or if he does not pay any rent
ii. It is mandatory for employee to report PAN of the landlord to the empl
oyer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 date
d 10th October, 2013].
2. 10(1 Children Education Allowance Up to Rs. 100 per month per child up to a maximum of 2 children is exempt
4)
3. 10(1 Hostel Expenditure Allowance Up to Rs. 300 per month per child up to a maximum of 2 children is exempt
4)
4. 10(1 Transport Allowance granted to an employee to meet ex Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb
4) penditure for the purpose of commuting between place or orthopedically handicapped with disability of lower extremities
of residence and place of duty
5. Sec. 1 Transport Allowance to an employee working in any tra Amount of exemption shall be lower of following:
0(14) nsport business to meet his personal expenditure during a) 70% of such allowance; or
his duty performed in the course of running of such tran b) Rs. 10,000 per month.
sport from one place to another place provided employe
e is not in receipt of daily allowance.
6. 10(1 Conveyance Allowance granted to meet the expenditure Exempt to the extent of expenditure incurred
4) on conveyance in performance of duties of an office
7. 10(1 Any Allowance granted to meet the cost of travel on tou Exempt to the extent of expenditure incurred
4) r or on transfer
8. 10(1 Daily Allowance to meet the ordinary daily charges inc Exempt to the extent of expenditure incurred
4) urred by an employee on account of absence from his n
ormal place of duty
9. 10(1 Helper/Assistant Allowance Exempt to the extent of expenditure incurred
4)
1 10(1 Research Allowance granted for encouraging the acade Exempt to the extent of expenditure incurred
0. 4) mic research and other professional pursuits
1 10(1 Uniform Allowance Exempt to the extent of expenditure incurred
1. 4)
1 10(7) Foreign allowances or perquisites paid or allowed by G Fully Exempt
2. overnment to its employees (an Indian citizen) posted o
utside India
1 - Allowances to Judges of High Court/Supreme Court (S Fully Exempt.
3. ubject to certain conditions)
1 10(4 Following allowances and perquisites given to serving Fully Exempt
4. 5) Chairman/Member of UPSC is exempt from tax:
a) Value of rent free official residence
b) Value of conveyance facilities including transport all
owance
c) Sumptuary allowance
d) Leave travel concession
1 - Allowances paid by the UNO to its employees Fully Exempt
5.
1 10(4 Allowances to Retired Chairman/Members of UPSC (S Exempt subject to maximum of Rs.14,000 per month for defraying services
6. 5) ubject to certain conditions) of an orderly and for secretarial assistant on contract basis.
 The value of residential telephone free of cost and the number of free calls t
o the extent of 1500 per month shall be exempt.
1 Sec. 1 Special compensatory Allowance (Hilly Areas) (Subjec Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per m
7. 0(14) t to certain conditions and locations) onth.
1 Sec. 1 Border area allowances, Remote Locality allowance or Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per m
8. 0(14) Disturbed Area allowance or Difficult Area Allowance onth.
(Subject to certain conditions and locations)
1 Sec. 1 Tribal area allowance given in (a) Madhya Pradesh (b) Rs. 200 per month
9. 0(14) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura
(f) Assam (g) West Bengal (h) Bihar (i) Orissa
2 Sec. 1 Compensatory Field Area Allowance. If this exemption Rs. 2,600 per month
0. 0(14) is taken, employee cannot claim any exemption in respe
ct of border area allowance (Subject to certain condition
s and locations)
2 Sec. 1 Compensatory Modified Area Allowance. If this exemp Rs. 1,000 per month
1. 0(14) tion is taken, employee cannot claim any exemption in r
espect of border area allowance (Subject to certain cond
itions and locations)
2 Sec. 1 Counter Insurgency Allowance granted to members of Rs. 3,900 per month
2. 0(14) Armed Forces operating in areas away from their perma
nent locations. If this exemption is taken, employee can
not claim any exemption in respect of border area allow
ance (Subject to certain conditions and locations)
2 Sec. 1 Underground Allowance is granted to employees worki Up to Rs. 800 per month
3. 0(14) ng in uncongenial, unnatural climate in underground mi
nes
2 Sec. 1 High Altitude Allowance is granted to armed forces ope a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)
4. 0(14) rating in high altitude areas (Subject to certain conditio b) Up to Rs. 1,600 per month (for altitude above 15,000 feet)
ns and locations)
2 Sec. 1 Highly active field area allowance granted to members Up to Rs. 4,200 per month
5. 0(14) of armed forces (Subject to certain conditions and locati
ons)
2 Sec. 1 Island Duty Allowance granted to members of armed fo Up to Rs. 3,250 per month
6. 0(14) rces in Andaman and Nicobar and Lakshadweep group
of Island (Subject to certain conditions and locations)
B. Perquisites
1. 17(2) Rent free unfurnished accommodation provided to Cent License Fees determined in accordance with rules framed by Government f
(i)/(ii) ral and State Government employees or allotment of houses shall be deemed to be the taxable value of perquisite
read s.
with
Rule
3(1)
2. 17(2) Unfurnished rent free accommodation provided to other Taxable value of perquisites
(i)/(ii) employees A. If House Property is owned by the employer:
read i. 15% of salary, if population of city where accommodation is provided e
with xceeds 25 lakhs as per 2001 census
Rule ii. 10% of salary, if population of city where accommodation is provided e
3(1) xceeds 10 lakhs but does not exceed 25 lakhs as per 2001 census
iii. 7.5% of salary, if accommodation is provided in any other city
B. If House Property is taken on lease or rent by the employer, the perquisit
e value shall be :
i. Lease rent paid or payable by the employer or 15% of the salary, whichev
er is lower
*Salary includes:
a) Basic Pay
b) Dearness Allowance (only to the extent it forms part of retirement bene
fit salary)
c) Bonus
d) Commission
e) All other allowances (only taxable portion)
f) Any monetary payment which is chargeable to tax
But does not include
i. Value of any perquisite [under section 17(2)]
ii. Employer’s contribution to PF
iii. Benefits received at the time of retirement like gratuity, pension etc.
Note:
1) Rent free accommodation is not chargeable to tax if provided to an emp
loyee working at mining site or an on-shore oil exploration site, etc.,
 —
(i) which is being of temporary nature (subject to conditions)
(ii) which is located in remote area.
2) Rent free accommodation if provided to High Court or Supreme Court
Judges, Union Ministers, Leader of Opposition in Parliament, an offic
ial in Parliament and Serving Chairman and members of UPSC is Tax
Free Perquisites.
3) The value so determined shall be reduced by the amount of rent, if any,
paid by the employee.
4) If employee is transferred and retain property at both the places, the tax
able value of perquisites for initial period of 90 days shall be determin
ed with reference to only one accommodation (at the option of the ass
essee). The other one will be tax free. However after 90 days, taxable
value of perquisites shall be charged with reference to both the accom
modations.
3. 17(2) Rent free furnished accommodation Taxable value of perquisites
(i)/(ii) a) Find out taxable value of perquisite assuming accommodation to be provi
read ded to the employee is unfurnished
with b) Add: 10% of original cost of furniture and fixtures (if these are owned by
Rule the employer) or actual higher charges paid or payable (if these are taken on
3(1) rent by the employer).
Note: The value so determined shall be reduced by the amount of rent, if an
y, paid by the employee
4. 17(2) A furnished accommodation in a Hotel Taxable value of perquisites
(i)/(ii) Value of perquisite shall be lower of following:
read a) Actual charges paid or payable by the employer to such hotel
with b) 24% of salary
Rule
Note: Hotel accommodation will not be chargeable to tax if :
3(1)
a) It is provided for a total period not exceeding in aggregate 15 days in th
e financial year; and
b) Such accommodation in hotel is provided on employee’s transfer from
one place to another place.
5. 17(2) Any sum paid by employer in respect of any obligation Fully Taxable
(iv) of an employee
5 17(2) Contribution made to the account of the assessee by the To the extent it exceeds Rs. 7,50,000
A. (vii) employer––
(a) in a recognised provident fund;
(b) in the scheme referred to in section 80CCD(1); and
(c) in an approved superannuation fund
5 17(2) Any annual accretion by way of interest, dividend or an To the extent it relates to the employer’s contribution which is included in t
B. (iv) y other amount of similar nature during the previous ye otal income
ar to the balance at the credit of the fund or scheme
5 17(2) Motor Car / Other Conveyance Taxable value of perquisites (See Note 1 below)
C. (viii)
read
with
Rule
3(2)
6. 17(2) Services of a domestic servant including sweeper, garde Taxable value of perquisite shall be salary paid or payable by the employer f
(viii) ner, watchmen or personal attendant or such services less any amount recovered from the employee.
read (Taxable in case of specified employee only [See Note
with 4])
Rule
3(3)
7. 17(2) Supply of gas, electricity or water for household purpos Taxable value of perquisites:
(viii) es 1. Manufacturing cost per unit incurred by the employer., if provided from
read resources owned by the employer;
with 2. Amount paid by the employer, if purchased by the employer from outsi
Rule de agency
3(4) Note:
i. Any amount recovered from the employee shall be deducted from the t
axable value of perquisite.
ii. Taxable in case of specified employees only [See note 4]
8. 17(2) Education Facilities Taxable value of perquisites (See Note 2 below)
(viii)
read
with
Rule
3(5)
9. 17(2) Transport facilities provided by the employer engaged i Value at which services are offered by the employer to the public less amou
(viii) n carriage of passenger or goods (except Airlines or Rai nt recovered from the employee shall be a taxable perquisite
 read lways)
with (Taxable in case of specified employee only [See Note
Rule 4])
3(6)
1 17(2) Amount payable by the employer to effect an insurance Fully Taxable
0. (v) on life of employee or to effect a contract for an annuity
1 17(2) ESOP/ Sweat Equity Shares Taxable value of perquisites
1. (vi) re Fair Market value of shares or securities on the date of exercise of option by
ad wit the assessee less amount recovered from the employee in respect of such sh
h Rul ares shall be the taxable value of perquisites.
e 3
Fair Market Value shall be determined as follows:
(8)/3
(9) a) In case of listed Shares: Average of opening and closing price as on dat
e of exercise of option (Subject to certain conditions and circumstance
s)
b) In case of unlisted shares/ security other than equity shares: Value dete
rmined by a Merchant Banker as on date of exercise of option or an ea
rlier date, not being a date which is more than 180 days earlier than th
e date of exercise of the option.
Note:
The Finance Act, 2020 has deferred the taxation of perquisite in case of star
t-ups from date of allotment to the earliest of the following three dates:
1. Expiry of 48 months from the end of the relevant assessment year;
2. Sale of such shares by the employees;
3. Date on which employee ceases to be employee of the start-up.
The eligible start-up shall accordingly, be required to deposit tax with the g
overnment within 14 days of the happening of any of the above events (whi
chever is earlier). However, Section 17(2)(vi) has not been amended, thus th
e income shall be computed in the year in which shares are allotted but tax s
hall be paid in subsequent year.
1 17(2) Employer’s contribution towards superannuation fund Taxable in the hands of employee to the extent such contribution exceed Rs.
2. (vii) 1,50,000
1 17(2) Interest free loan or Loan at concessional rate of interes Interest free loan or loan at concessional rate of interest given by an employ
3. (viii) t er to the employee (or any member of his household) is a perquisite chargea
read ble to tax in the hands of all employees on following basis:
with 1. Find out the ‘maximum outstanding monthly balance’ (i.e. the aggregat
Rule e outstanding balance for each loan as on the last day of each month);
3(7)
2. Find out rate of interest charged by the SBI as on the first day of releva
(i)
nt previous year in respect of loan for the same purpose advanced by i
t;
3. Calculate interest for each month of the previous year on the outstandi
ng amount (mentioned in point 1) at the rate of interest (given in point
2)
4. Interest actually recovered, if any, from employee
5. The balance amount (point 3-point 4) is taxable value of perquisite
Nothing is taxable if:
a) Loan in aggregate does not exceed Rs 20,000
b) Loan is provided for treatment of specified diseases (Rule 3A) like neu
rological diseases, Cancer, AIDS, Chronic renal failure, Hemophilia
(specified diseases). However, exemption is not applicable to so much
of the loan as has been reimbursed to the employee under any medical
insurance scheme.
1 17(2) Facility of travelling, touring and accommodation avail a) Perquisite value taxable in the hands of employee shall be expenditure i
4. (viii) ed of by the employee or any member of his household ncurred by the employer less amount recovered from employee.
read for any holiday b) Where such facility is maintained by the employer, and is not available
with uniformly to all employees, the value of benefit shall be taken to be th
Rule e value at which such facilities are offered by other agencies to the pu
3(7)(i blic less amount recovered from employee.
i)
1 17(2) Free food and beverages provided to the employee 1) Fully Taxable: Free meals in excess of Rs. 50 per meal less amount pai
5. (viii) d by the employee shall be a taxable perquisite
read 2) Exempt from tax: Following free meals shall be exempt from tax
with
a) Food and non-alcoholic beverages provided during working hou
Rule
rs in remote area or in an offshore installation;
3(7)(ii
i) b) Tea, Coffee or Non-Alcoholic beverages and Snacks during wor
king hours are tax free perquisites;
c) Food in office premises or through non-transferable paid vouche
rs usable only at eating joints provided by an employer is not t
axable, if cost to the employer is Rs. 50(or less) per meal.
1 17(2) Gift or Voucher or Coupon on ceremonial occasions or a) Gifts in cash or convertible into money (like gift cheque) are fully taxab
6. (viii) otherwise provided to the employee le
read b) Gift in kind up to Rs.5,000 in aggregate per annum would be exempt, b
with eyond which it would be taxable.
Rule
 3(7)(i
v)
1 17(2) Credit Card a) Expenditure incurred by the employer in respect of credit card used by t
7. (viii) he employee or any member of his household less amount recovered f
read rom the employee is a taxable perquisite
with b) Expenses incurred for official purposes shall not be a taxable perquisite
Rule provided complete details in respect of such expenditure are maintain
3(7) ed by the employer
(v)
1 17(2) Free Recreation/ Club Facilities a) Expenditure incurred by the employer towards annual or periodical fee
8. (viii) etc. (excluding initial fee to acquire corporate membership) less amou
read nt recovered from the employee is a taxable perquisite
with b) Expenses incurred on club facilities for the official purposes are exempt
Rule from tax.
3(7)(v c) Use of health club, sports and similar facilities provided uniformly to al
i)
l employees shall be exempt from tax.
1 17(2) Use of movable assets of the employer by the employee Taxable value of perquisites
9. (viii) is a taxable perquisite a) Use of Laptops and Computers: Nil
read
b) Movable asset other than Laptops, computers and Motor Car*: 10% of
with
original cost of the asset (if asset is owned by the employer) or actual
Rule
higher charges incurred by the employer (if asset is taken on rent) less
3(7)(v
amount recovered from employee.
ii)
*See Note 1 for computation of perquisite value in case of use of the Motor
Car
2 17(2) Transfer of movable assets by an employer to its emplo Taxable value of perquisites
0. (viii) yee a) Computers, Laptop and Electronics items: Actual cost of asset less depr
read eciation at 50% (using reducing balance method) for each completed
with year of usage by employer less amount recovered from the employee
Rule
b) Motor Car: Actual cost of asset less depreciation at 20% (using reducin
3(7)(v
g balance method) for each completed year of usage by employer less
iii)
amount recovered from the employee
c) Other movable assets: Actual cost of asset less depreciation at 10% (on
SLM basis) for each completed year of usage by employer less amoun
t recovered from the employee.
2 17(2) Any other benefit or amenity extended by employer to e Taxable value of perquisite shall be computed on the basis of cost to the em
1. (viii) mployee ployer (under an arm’s length transaction) less amount recovered from the e
read mployee.
with However expenses on telephones including a mobile phone incurred by the
Rule employer on behalf of employee shall not be treated as taxable perquisite.
3(7)(i
x)
2 10(10 Tax paid by the employer on perquisites (not provided f Fully exempt
2. CC) or by way of monetary payments) given to employee
2 10(5) Leave Travel Concession or Assistance (LTC/LTA), ext The exemption shall be limited to fare for going anywhere in India along wi
3. ended by an employer to an employee for going anywh th family twice in a block of four years:
ere in India along with his family* i. Exemption limit where journey is performed by Air - Air fare of econo
*Family includes spouse, children and dependent broth my class in the National Carrier by the shortest route or the amount sp
er/sister/parents. However, family doesn’t include more ent, whichever is less
than 2 children of an Individual born on or after 01-10- ii. Exemption limit where journey is performed by Rail - Air-conditioned
1998. first class rail fare by the shortest route or the amount spent, whicheve
r is less
iii. Exemption limit if places of origin of journey and destination are conn
ected by rail but the journey is performed by any other mode of transp
ort - Air-conditioned first class rail fare by the shortest route or the am
ount spent, whichever is less
iv. Exemption limit where the places of origin of journey and destination a
re not connected by rail:
a. Where a recognized public transport system exists - First Class or
deluxe class fare by the shortest route or the amount spent, whi
chever is less
b. Where no recognized public transport system exists - Air conditi
oned first class rail fare by shortest route or the amount spent,
whichever is less
Notes:
i. Two journeys in a block of 4 calendar years is exempt
ii. Taxable only in case of Specified Employees [See note 4]
2 Provis Medical facilities in India 1) Expense incurred or reimbursed by the employer for the medical treatm
4. o to s ent of the employee or his family (spouse and children, dependent - pa
ection rents, brothers and sisters) in any of the following hospital is not char
17(2) geable to tax in the hands of the employee:
a) Hospital maintained by the employer.
b) Hospital maintained by the Government or Local Authority or a
ny other hospital approved by Central Government
 c) Hospital approved by the Chief Commissioner having regard to t
he prescribed guidelines for treatment of the prescribed disease
s.
2) Medical insurance premium paid or reimbursed by the employer is not
chargeable to tax.
2 Provis Medical facilities outside India Any expenditure incurred or reimbursed by the employer for medical treatm
5. o to s ent of the employee or his family member outside India is exempt to the ext
ection ent of following (subject to certain condition):
17(2) a) Expenses on medical treatment - exempt to the extent permitted by RB
I.
b) Expenses on stay abroad for patient and one attendant - exempt to the e
xtent permitted by RBI.
c) Cost on travel of the employee or any family or one attendant - exempt,
if Gross Total Income (before including the travel expenditure) of the
employee, does not exceed Rs. 2,00,000.
C. Deduction from salary

1. 16(ia) Standard Deduction Rs. 50,000 or the amount of salary, whichever is lower
2. 16 (ii) Entertainment Allowance received by the Government Least of the following is deductible :
employees (Fully taxable in case of other employees) a) Rs 5,000
b) 1/5th of salary (excluding any allowance, benefits or other perquisite)
c) Actual entertainment allowance received
3. 16(iii) Employment Tax/Professional Tax. Amount actually paid during the year is deductible. However, if profession
al tax is paid by the employer on behalf of its employee than it is first includ
ed in the salary of the employee as a perquisite and then same amount is all
owed as deduction.
D. Retirement Benefits
a) Leave Encashment
1. 10(10 Encashment of unutilized earned leave at the time of ret Fully Exempt
AA) irement of Government employees
2. 10(10 Encashment of unutilized earned leave at the time of ret Least of the following shall be exempt from tax:
AA) irement of other employees (not being a Government e a) Amount actually received
mployee) b) Unutilized earned leave* X Average monthly salary
c) 10 months Average Salary**
d) Rs. 3,00,000
*While computing unutilized earned leave, earned leave entitlements canno
t exceed 30 days for each year of service rendered to the current employer
**Average salary = Average Salary*** of last 10 months immediately prece
ding the retirement
***Salary = Basic Pay + Dearness Allowance (to the extent it forms part of
retirement benefits)+ turnover based commission
b) Retrenchment Compensation
1. 10(10 Retrenchment Compensation received by a workman un Least of the following shall be exempt from tax:
B) der the Industrial Dispute Act, 1947(Subject to certain c a) an amount calculated as per section 25F(b) of the Industrial Disputes A
onditions). ct, 1947;
b) Rs. 5,00,000; or
c) Amount actually received
Note:
i. Relief under Section 89(1) is available
ii. 15 days average pay for each completed year of continuous service or a
ny part thereof in excess of 6 months is to be adopted under section 2
5F(b) of the Industrial Disputes Act, 1947.
c) Gratuity
1. 10(1 Gratuity received by Government Employees (Other tha Fully Exempt
0)(i) n employees of statutory corporations)
2. 10(1 Death -cum-Retirement Gratuity received by other empl Least of following amount is exempt from tax:
0)(ii) oyees who are covered under Gratuity Act, 1972 (other 1. (*15/26) X Last drawn salary** X completed year of service or part the
than Government employee) (Subject to certain conditi reof in excess of 6 months.
ons). 2. Rs. 20,00,000
3. Gratuity actually received.
*7 days in case of employee of seasonal establishment.
** Salary = Last drawn salary including DA but excluding any bonus, com
mission, HRA, overtime and any other allowance, benefits or perquisite
3. 10(1 Death -cum-Retirement Gratuity received by other empl Least of following amount is exempt from tax:
0)(iii) oyees who are not covered under Gratuity Act, 1972 (ot 1. Half month’s Average Salary* X Completed years of service
her than Government employee) (Subject to certain con
2. Rs. 20,00,000
ditions).
3. Gratuity actually received.
 *Average salary = Average Salary of last 10 months immediately preceding
the month of retirement
** Salary = Basic Pay + Dearness Allowance (to the extent it forms part of r
etirement benefits)+ turnover based commission
d) Pension
1. - Pension received from United Nation Organization by t Fully Exempt
he employee of his family members
2. 10(10 Commuted Pension received by an employee Central G Fully Exempt
A)(i) overnment, State Government, Local Authority Employ
ees and Statutory Corporation
3. 10(10 Commuted Pension received by other employees who a 1/3 of full value of commuted pension will be exempt from tax
A)(ii) lso receive gratuity
4. 10(10 Commuted Pension received by other employees who d 1/2 of full value of commuted pension will be exempt from tax
A)(iii) o not receive any gratuity
5. 10(1 Family Pension received by the family members of Ar Fully Exempt
9) med Forces
6. 57(ii Family pension received by family members in any oth 33.33% of Family Pension subject to maximum of Rs. 15,000 shall be exem
a) er case pt from tax
e) Voluntary Retirement
1. 10(10 Amount received on Voluntary Retirement or Voluntary Least of the following is exempt from tax:
C) Separation (Subject to certain conditions) 1) Actual amount received as per the guidelines i.e. least of the following
a) 3 months salary for each completed year of services
b) Salary at the time of retirement X No. of months of services left for reti
rement; or
2) Rs. 5,00,000
f) Provident Fund
1. - Employee’s Provident Fund For taxability of contribution made to various employee’s provident fund an
d interest arising thereon see Note 3.
g) National Pension System (NPS)
1. 10(12 National Pension System Any payment from the National Pension System Trust to an assessee on clo
A)/10 sure of his account or on his opting out of the pension scheme referred to in
(12B) section 80CCD, to the extent it does not exceed 60% of the total amount pa
yable to him at the time of such closure or his opting out of the scheme.
Note: Partial withdrawal from the NPS shall be exempt to the extent of 25%
of amount of contributions made by the employee.
E. Arrear of Salary and relief under section 89(1)
1. 15 Arrear of salary and advance salary Taxable in the year of receipt. However relief under section 89 is available
2. 89 Relief under Section 89 If an individual receives any portion of his salary in arrears or in advance or
receives profits in lieu of salary, he can claim relief as per provisions of sect
ion 89 read with rule 21A
F. Other Benefits
1. - Lump-sum payment made gratuitously or by way of co Fully Exempt in the hands of widow or other legal heirs of employee
mpensation or otherwise to widow or other legal heirs o
f an employee who dies while still in active service [Cir
cular No. 573, dated 21-08-1990]
2. - Ex-gratia payment to a person (or legal heirs) by Centra Fully Exempt in the hands of individual or legal heirs
l or State Government, Local Authority or Public Sector
Undertaking consequent upon injury to the person or de
ath of family member while on duty [Circular No. 776,
dated 08-06-1999]
3. - Salary received from United Nation Organization [Circ Fully Exempt
ular No. 293, dated 10-02-1981]
4. 10(6) Salary received by foreign national as an officials of an Fully Exempt if corresponding official in that foreign country enjoys a simil
(ii) embassy, high commission, legation, consulate or trade ar exemption
representation of a foreign state
5. 10(6) Remuneration received by non-resident foreign citizen Fully exempt
(vi) as an employee of a foreign enterprise for services rend
ered in India, if:
a) Foreign enterprise is not engaged in any trade or bu
siness in India
b) His stay in India does not exceed in aggregate a per
iod of 90 days in such previous year
c) Such remuneration is not liable to deducted from th
e income of employer chargeable under this Act
6. 10(6) Salary received by a non-resident foreign national for se Fully exempt
(viii) rvices rendered in connection with his employment on a
foreign ship if his total stay in India does not exceed 90
days in the previous year.
7. - Salary and allowances received by a teacher /professor f Fully Exempt
rom SAARC member state (Subject to certain condition
s).

Notes:
1. Motor Car (taxable only in case of specified employees [See note 4]) except when car owned by the employee is used by him or members of his
household wholly for personal purposes and for which reimbursement is made by the employer)
S. No. Circumstances Engine Capacity upto 1600 cc (value of pe Engine Capacity above 1600 cc (value of p
rquisite ) erquisite)
1 Motor Car is owned or hired by the employer
1.1 Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.
1.1-A If car is used wholly and exclusively in t Fully exempt subject to maintenance of speci Fully exempt subject to maintenance of speci
he performance of official duties. fied documents fied documents
1.1-B If car is used exclusively for the personal Actual amount of expenditure incurred by the employer on the running and maintenance of
purposes of the employee or any member motor car including remuneration paid by the employer to the chauffeur and increased by th
of his household. e amount representing normal wear and tear of the motor car at 10% p.a. of the cost of vehic
le less any amount charged from the employee for such use is taxable
1.1-C The motor car is used partly in the perfor Rs. 1,800 per month (plus Rs. 900 per mont Rs. 2,400 per month (plus Rs. 900 per mont
mance of duties and partly for personal p h, if chauffeur is also provided to run the mot h, if chauffeur is also provided to run the mot
urposes of the employee or any member or car) or car)
of his household.
Nothing is deductible in respect of any amount recovered from the employee.
1.2 Where maintenances and running expenses are met by the employee.
1.2-A If car is used wholly and exclusively in t Not a perquisite, hence, not taxable Not a perquisite, hence, not taxable
he performance of official duties.
1.2-B If car is used exclusively for the personal Expenditure incurred by the employer (i.e. hire charges, if car is on rent or normal wear and
purposes of the employee or any member tear at 10% of actual cost of the car) plus salary of chauffeur if paid or payable by the emplo
of his household yer minus amount recovered from the employee.
1.2-C The motor car is used partly in the perfor Rs. 600 per month (plus Rs. 900 per month, i Rs. 900 per month (plus Rs. 900 per month, i
mance of duties and partly for personal p f chauffeur is also provided to run the motor f chauffeur is also provided to run the motor
urposes of the employee or any member car) car)
of his household
Nothing is deductible in respect of any amount recovered from the employee.
2 Motor Car is owned by the employee
2.1 Where maintenances and running expenses including remuneration of the chauffeur are met or reimbursed by the employer.
2.1-A The reimbursement is for the use of the v Fully exempt subject to maintenance of speci Fully exempt subject to maintenance of speci
ehicle wholly and exclusively for official fied documents fied documents
purposes
2.1-B The reimbursement is for the use of the v Actual expenditure incurred by the employer minus amount recovered from the employee
ehicle exclusively for the personal purpo
ses of the employee or any member of hi
s household
2.1-C The reimbursement is for the use of the v Actual expenditure incurred by the employer Actual expenditure incurred by the employer
ehicle partly for official purposes and par minus Rs. 1800 per month and Rs. 900 per m minus Rs. 2400 per month and Rs. 900 per m
tly for personal purposes of the employee onth if chauffer is also provided minus amou onth if chauffer is also provided minus amou
or any member of his household. nt recovered from employee. nt recovered from employee.
3 Where the employee owns any other automotive conveyance and actual running and maintenance charges are met or reimburs
ed by the employer
3.1 Reimbursement for the use of the vehicle Fully exempt subject to maintenance of speci Fully exempt subject to maintenance of speci
wholly and exclusively for official purpo fied documents fied documents
ses;
3.2 Reimbursement for the use of vehicle par Actual expenditure incurred by the employer Not Applicable
tly for official purposes and partly for per minus Rs. 900 per month minus amount reco
sonal purposes of the employee. vered from employee

2. Educational Facilities
Taxable only in the hands of specified employees [See note 4]
Facility e Value of perquisite
xtended t
o Provided in the school owned by the employer Provided in any other school

Children Cost of such education in similar school less Rs. 1,000 per month per child Amount incurred less amount recovered from employee
(irrespective of numbers of children) less amount recovered from employe (an exemption of Rs. 1,000 per month per child is allowe
e d)
Other fa Cost of such education in similar school less amount recovered from empl Cost of such education incurred
mily me oyee
mber
2.1 Other Educational Facilities
Particulars Taxable Value of Perquisites
Reimbursement of school fees of children or family member of employees Fully taxable
Free educational facilities/ training of employees Fully exempt
3. Employees Provident Fund
Tax treatment in respect of contributions made to and payment from various provident funds are summarized in the table given below:
Particulars Statutory prov Recognized provident fund Unrecognized provident fu Public provi
ident fund nd dent fund
Employers contribution to provident fund Fully Exempt Exempt only to the extent of 12% of s Fully Exempt -
alary*
Deduction under section 80C on employe Available Available Not Available Available
es contribution
Interest credited to provident fund Fully Exempt Exempt only to the extent rate of inter Fully Exempt Fully Exempt
est does not exceed 9.5%
Payment received at the time of retireme Fully Exempt Fully Exempt (Subject to certain condi Fully Taxable (except emplo Fully Exempt
nt or termination of service tions and circumstances) yee’s contribution)
* Salary = Basic Pay + Dearness Allowance (to the extent it forms part of retirement benefits) + turnover based commission
Payment from recognized provident fund shall be exempt in the hands of employees in following circumstances:
a) If employee has rendered continue service with his employer (including previous employer, when PF account is transferred to current
employer) for a period of 5 years or more
b) If employee has been terminated because of certain reasons which are beyond his control (ill health, discontinuation of business of employer,
etc.)
4. Specified Employee
The following employees are deemed as specified employees:
1) A director-employee
2) An employee who has substantial interest (i.e. beneficial owner of equity shares carrying 20% or more voting power) in the employer-
company
3) An employee whose monetary income* under the salary exceeds Rs. 50,000
*Monetary Income means Income chargeable under the salary but excluding perquisite value of all non-monetary perquisites

[As amended by Finance Act, 2020]