Income Tax

Definitions

2. In these rules, unless the context otherwise requires,—

1. “Act” means the Income-tax Act, 1961 (43 of 1961);
2. “authorized bank” means any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);
3. “Chapter”, “section” and “Schedule” means respectively Chapter and section of, and Schedule to, the Act.
4. All references to “Forms” in these rules shall be construed as references to the forms set out in Appendix II hereto.

Read More

Limits for the purposes of section 10(13A)

2A. The amount which is not to be included in the total income of an assessee in respect of the special allowance referred to in clause (13A) of section 10 shall be—

• the actual amount of such allowance received by the assessee in respect of the relevant period; or
• the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee in respect of the relevant period; or
• an amount equal to—
  1. where such accommodation is situate at Bombay, Calcutta, Delhi or Madras, one-half of the amount of salary due to the assessee in respect of the relevant period; and
  2. where such accommodation is situate at any other place, two-fifth of the amount of salary due to the assessee in respect of the relevant period

Read More

Conditions for the purpose of section 10(5)

2B. The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,—

1. on leave to any place in India;
2. to any place in India after retirement from service or after the termination of his service,shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely :—
   • where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination;
   • where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and
   • where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997, between such places, the amount eligible for exemption shall be :—
     1. where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and
     2. where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail

Read More

Guidelines for the purposes of section 10(10C).

2BA. The amount 12received by an employee of—

1. a public sector company; or
2. any other company; or
3. an authority established under a Central, State or Provincial Act; or
4. a local [authority; or]
5. a co-operative society; or
6. a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); oR
7. an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or
8. an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or
9. such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf

• at the time of his voluntary retirement [or voluntary separation] shall be exempt under clause (10C) of section 10 only if the scheme of voluntary retirement framed by the aforesaid company or authority [or co-operative society or University or institute], as the case may be [or if the scheme of voluntary separation framed by a public sector company,] is in accordance with the following requirements, namely :—
  1. it applies to an employee who has completed 10 years of service or completed 40 years of age;
  2. it applies to all employees (by whatever name called) including workers and executives of a company or of an authority or of a co-operative society, as the case may be, excepting directors of a company or of a co-operative society;
  3. the scheme of voluntary retirement [or voluntary separation] has been drawn to result in overall reduction in the existing strength of the employees
  4. the vacancy caused by the voluntary retirement [or voluntary separation] is not to be filled up;
  5. the retiring employee of a company shall not be employed in another company or concern belonging to the same management;
  6. the amount receivable on account of voluntary retirement [or voluntary separation] of the employee does not exceed the amount equivalent to [three months] salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service left before the date of his retirement on superannuation

Provided that requirement of (i) above would not be applicable in case of amount received by an employee of a public sector company under the scheme of voluntary separation framed by such public sector company.
Explanation: In this rule, the expression “salary” shall have the same meaning as is assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule.
Read More

Prescribed allowances for the purposes of clause (14) of section 10

2BB. For the purposes of sub-clause (i) of clause (14) of section 10, prescribed allowances, by whatever name called, shall be the following, namely :—

1. any allowance granted to meet the cost of travel on tour or on transfer;
2. any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty;
3. any allowance granted to meet the expenditure incurred on con-veyance in performance of duties of an office or employment of profit :
   Provided that free conveyance is not provided by the employer;
4. any allowance granted to meet the expenditure incurred on a helper where such helper is engaged for the performance of the duties of an office or employment of profit;
5. any allowance granted for encouraging the academic, research and training pursuits in educational and research institutions;
6. any allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit.

Read More

Circumstances and conditions for the purposes of clause (19) of section 10

2BBA. For the purposes of clause (19) of section 10, the circumstances of death of a member of the armed forces (including para-military forces) of the Union in the course of operational duties shall be the following, namely :—

1. acts of violence or kidnapping or attacks by terrorists or anti-social elements;
2. action against extremists or anti-social elements;
3. enemy action in international war;
4. action during deployment with a peace keeping mission abroad;
5. border skirmishes;
6. laying or clearance of mines including enemy mines as also mine sweeping operations;
7. explosions of mines while laying operationally oriented mine-fields or lifting or negotiation mine-fields laid by the enemy or own forces in operational areas near international borders or the line of control;
8. in the aid of civil power in dealing with natural calamities and rescue operations;
9. in the aid of civil power in quelling agitation or riots or revolts by demonstrators.

Read More

Percentage of Government grant for considering university, hospital etc. as substantially financed by the Government for the purposes of clause (23C) of section 10

2BBB. For the purposes of sub-clauses (iiiab) and (iiiac) of clause (23C) of section 10, any university or other educational institution, hospital or other institution referred therein, shall be considered as being substantially financed by the Government for any previous year, if the Government grant to such university or other educational institution, hospital or other institution exceeds fifty per cent of the total receipts including any voluntary contributions, of such university or other educational institution, hospital or other institution, as the case may be, during the relevant previous year

Read More

Amount of annual receipts for the purposes of sub-clauses (iiiad) and (iiiae) of clause (23C) of section 10.

1. For the purposes of sub-clause (iiiad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any university or other educational institution, existing solely for educational purposes and not for purposes of profit, shall be one crore rupees.
2. For the purposes of sub-clause (iiiae) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be one crore rupees

Read More