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Entertainme nt allowance
Basic salary DA( computed) Bonus, fees, comm. & other cash allowances to the extent they are taxable
Basic salary DA( computed) Commission based on fixed % of turnover achieved by the employee & given under terms of employment
Pension
Pension received by the employee is taxable Family pension received by a nominee on the death of employee is taxable under the head Income from. Commutation of pension lump sum payment in lieu of periodical payment. Where the employee receives any gratuity: commuted value of 1/3rd of the pension Where he does not receives gratuity: commuted value of of such pension
Numerical
Leave encashment
Cash equivalent of leave salary ( calculated on the basis of avg. salary drawn during the 10 months preceding retirement) for the period of earned leave standing to the credit of the employee at the time of his retirement or otherwise ( such leave entitlement not to exceed 30 days leave for every year of actual service) 10 months avg. salary, Rs 3,00,000, Amount actually received
Specified Employees
A director employee Employee having substantial interest in the employer company ( beneficial owner of equity shares carrying 20% or more voting power in the employer-company Any other employee whose monetary income under the head Salary exceeds Rs 50,000
Treatment of PF
During Job
Employees contribution SPF URPF Taxable Taxable Employers contribution Not taxable Not taxable Interest Not taxable Not taxable
On Retirement
Payment from the fund Fully exempt Employers contribution taxable Interest there on taxable as salary Employees contribution Not taxable Interest thereon taxable
RPF
Taxable
Nothing shall be taxable if: 1.Employee left the job after at least 5 yrs of services, or 2.Due to ill health, discontinuance of employers business or reasons beyond his control, or 3.The balance is transferred to RPF with new employer
Employees under RPF & SPF can claim deduction of their own contribution & employers contribution from gross total income u/s 80C
Medical facilities
In India Expenditure incurred or reimbursed on any medical treatment provided to an employee or any member of his family is fully exempt without limit for treatment in any hospital Maintained by the employer Maintained by the govt. or local authority Approved by govt. for its employees Approved for a specified disease Health insurance premium reimbursed for insurance on the health of employees or any member of his family is fully exempt Reimbursement by the employer of any amt actually spent by the employees for obtaining his or his family treatment in any hospital other than specified above, up to maximum of Rs. 15,000 p.a.
Outside India
Such medical expenses shall be tax free to the extent permitted by RBI Expenses on stay abroad of the employees or any member of his family for medical treatment with 1 attendant, to the extent permitted by RBI Travel expenses of patient & 1 attendant if gross total income (before including such travel expenses) does not exceed Rs. 2,00,000
Children Education
Education facility is owned & maintained by the employer Free education is provided in any other educational inst. The value shall be fees charged by a similar school in a similar locality Nothing shall be taxable if value per child does not exceed Rs 1,000 In any other case, value shall be actual expenditure