Do you know these incomes are fully exempt from Income tax
Updated: as per amended finance act 2020 [Section 10 of the Income Tax Act allows the computation of specific incomes as tax-free. Here we have listed tax-free income mainly under Section 10(6) and other import incomes which are tax-free under section 10 such as 10(1), 10(2), 10 (2A),10(4),10(4B), 10(10D,10(10BC),and10(15).] There are certain types of income…
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Tax benefits on retirement, VRS, and retrenchment of salaried persons
[This post elucidates details of tax components as well as tax exemption for earned Leave encashment, Gratuity, commutation of pension, NPS withdrawal, retrenchment compensation, , amount received on voluntary retirement, tax on EPF withdrawal etc.] Updated: As per amended finance act 2020 Leave encashment under section 10(10AA): The encashment of unutilized earned leave (read note-1)…
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How to calculate tax relief on salary arrears under Section 89(1)?
Updated: as per amended finance act 2020 If an individual receives any portion of his salary in arrears or in advance or arrears of family pension or receives profits in lieu of salary, then such amount is taxable in the financial year in which it is received. However, the assessee can claim relief for arrears…
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The taxable value of perquisite in respect of “sweat equity shares” or ESOP
Updated: As per amended finance act 2020 Sweat Equity Shares are Shares or Specified Securities issued at discount or for consideration other than cash to employees or directors of the company as reward their hard work or for their value addition in the progress of the company. ESOP (employee stock ownership plan) scheme comes with…
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Incometax calculation for Concessional or interest-free loans given by an employer
Updated: As per the amended finance act 2020 Interest-free loan or loan at a concessional rate of interest given by an employer to the employee (or any member of his household) is a perquisite chargeable to tax in the hands of the concerned employee under section 17(2)(viii) read with Rule 3(7)(i) of Income Tax act.…
Perquisite value of motor car expenses paid/reimbursed by employer
Updated: (As per amended Finance Act, 2020). Motor Car perquisite is taxable only in case of specified employees (as defined below in note-2). Tax on perquisite value calculated on the basis of whether the motor car is used for official purpose or partly official partly personal purpose or purely for private purpose. The value of…
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