CONCLUSION

I. DIFFERENT MEANINGS OF ‘SALARY’ FOR DIFFERENT PURPOSES

For Rent-free House Rent Qualifying Entertain- Gratuity Determination Compensation

computation House or Allowance Amount of ment of ` 50,000 u/s 10(10B)
of taxable Concession Contribution Allowance regarding
income under in rent to R.P.F. taxability of
the head perquisites
salaries u/s 17(2)(iii)(c)

1. Basic 1. Basic 1. Basic Same Basic Basic Basic Salary, Salary,

salary or Salary Salary. as for Salary Salary, D.A. Dearness allowance,
wages. (excluding 2. Dearness house exclusive (if given Allowance, value of rent-
2. Advance advance or Allowance Rent of any under the All other taxable free or
salary. arrear of if the terms Allowance allowance, terms of allowances, concessional
3. Arrears of salary of as per benefit employment) benefits accommo-
salary. received). employment preceding or other and received in dation light,
4. Annuity or 2. Taxable so provide, column. perquisite. Commission cash, Bonus, water or any
pension. Allowances. i.e. it is based on Commission, other amenity
5. Gratuity. 3. Bonus. taken into fixed etc. and all and travel
6. Fees, 4. Commis- account for percentage monetary concession; but
Commission, sion or, retirement of turnover. payments does not
Bonus. 5. Any benefits, It does not included in include Bonus,
7. Allowances monetary or Dearness include gross salary Gratuity
including payment Pay. bonus, after allowing employer’s
Dearness (Excluding (Excluding other deductions contribution to
Allowance. dearness all other commission, u/s 16. For any fund for
8. Profits in allowance allowances, H.R.A. over- this purpose retirement
lieu of salary. not entering bonus or time wages salary will not benefits.
9. Perquisites. into perquisites and any include
10. Excess retirement and all other perquisites
contribution benefits of extras). allowance and not received
to R.P.F. by the 3. Commission perquisites. in cash.
employer employee, based on If the
over 12% of employer’s fixed employee is
salary. contribution percentage covered by
11. Excess to R.P.F. of turnover the Gratuity
interest allowances achieved Act, D.A.
received from exempt by the will always
R.P.F. over from tax, employee be included
9.5% rate of deductible and given in salary.
interest will amount of under terms
be taxable. value of of
12. Taxable perquisites). employment.
portion of
transferred
balance to
R.P.F.

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