Exemption available U/s 10 in Income Tax, Plus All in one Master of Form 16 Part B for the Financial Year 2014-15

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Exemption available u/s 10 to salaried employee is summarised below for ready recokner. Section Income Maximum Exempt Amount Conditions 

1) 10(10) Gratuity.  Rs. 10,00,000  – Gratuity payable when employee has served minimum service of 4 years & 240 days. – Amt payable = No. of years completed X Last drawn Basics X 15 /26 

2) 10(10AA) Leave encashment  Rs. 3,00,000  – Any amount paid while continuation of the service with the said organisation is fully taxable. – Amt payable = Leave balance at the time of leaving organisation X avg. basic salary of last 10 months / 30 days – Maximum leave allowable per year to be considered as 30 days while calculating leave balance on leaving organisation 

3) 10(10B)  Retrenchment Compensation Rs. 3,00,000 – Subject to maximum  : An amount calculated as per section 25F (b) of the Industrial Disputes Act, 1947; or actual amount. – NA when received in accordance of Govt Scheme 

4) 10(10C) Compensation for voluntary retirement (V.R.S) Rs. 5,00,000 As per Rule 2BA of the Income Tax Rules. 

5) 10(10CC) Tax on non-monetary perquisites paid by the employer Actual amount paid NA 

6) 10(11) Payments received from a provident fund Actual amount paid See Section for more details 

7) 10(12) Accumulated balance in a recognized provident fund Actual amount paid See Section for more details 

8) 10(13A) House rent allowance Least of – 1. HRA actually paid 2. Rent paid Less 10% of Salary. 3. 50% of Salary if residing in Kolkata, Mumbai, Delhi or Chennai and 40% of Salary in other cases. NA



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