Page 99 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes
!
Caution The assessee shall not be eligible for relief under section 89 in case he has claimed
exemption under section 10(10C). On the other hand, if he claims relief under section 89,
he cannot claim exemption under section 10(10C)
16. Tax on perquisite paid by employer [Section 10(CC)]: As per section 10(CC), the amount of
tax actually paid by an employer, at his option, on non-monetary perquisites on behalf of
an employee, is not taxable in the hands of the employee. Such tax paid by the employer
shall not be treated as an allowable expenditure in the hands of the employer under
section 40.
17. Amount paid on life insurance policies [Section 10(10D)]: As per section 10(10D), any sum
received on life insurance policy (including bonus) is not chargeable to tax. Exemption is,
however, not available in respect of the amount received on the following policies:
a. any sum received under section 80DD (3) or 80DDA (3);
b. any sum received under a Keyman insurance policy;
c. any sum received under an insurance policy (issued after March 31, 2003) in respect
of which the premium payable for any of the years during the term of policy exceeds
20 per cent of the actual sum assured.

Did u know? “Keyman insurance policy” means a life insurance policy taken by a person
on the life of another person who is or was the employee of the first-mentioned person or
is or was connected in any manner whatsoever with the business of the first-mentioned
person.
In respect of (c) above, the following points should be noted:
Any sum received under such policy on the death of a person shall continue to be
exempt.
The value of any premiums agreed to be returned or of any benefit by way of bonus or
otherwise, over and above the sum actually assured, which is received under the policy
by any person, shall not be taken into account for the purpose of calculating the actual
capital sum assured under this clause.

18. Payment from statutory provident fund [section 10(11)]: Any payment received from a
provident fund to which the Provident Funds Act, 1925 applies or any other provident
fund set-up by the Central Government and notified by it in the Official Gazette, would be
exempt from tax without any monetary or other limits.

Notes Any payment received from a provident fund to which the Provident Funds Act,
1925 applies is known as Statutory Provident Fund and the provident fund set-up by the
Central Government and notified by it in the Official Gazette is known as Public Provident
Fund.
19. Payment from a recognised provident fund [section 10(12)]: The accumulated balance due
and becoming payable to an employee participating in a recognised provident fund,
would be exempt from tax if the following conditions are satisfied:

94 LOVELY PROFESSIONAL UNIVERSITY