Page 239 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning

Notes (v) Subsidised transport to cover journeys between office and residence

(vi) Employee’s contribution to group insurance scheme
(vii) Payment of premium for personal accident policy
(viii) Education allowance to the extent of ` 50 and hostel allowance of ` 150 per
month per child for utmost two children.
(g) Gas, Electricity, Water, etc.: This facility is non-taxable if gas, electricity, or water
is supplied to the employee out of employees own sources, the amount spent on
purchases is liable to tax in the hands of the employee.

!
Caution
1. LTC under section 10(5) IT Act is exempted from tax

2. Transport allowance @ ` 800/- per month is exempted from tax
3. Foreign allowance/perquisites under clause 10(7) paid outside to Indian citizen by
government for providing services outside India is exempted from tax.
4. Gratuity up to 3.5 lakh is exempted from tax
5. Leave salary or unavailed leave on retirement
6. Government employees fully exempted
7. Non-government employees up to 3 lakh

8. Pension is fully exempted
9. Retirement compensation are exempted
10. Retrenchment compensation under IT Act is exempted
11. Payment from statutory PF is exempted
12. HRA under Section 10(13A) is exempted
13. Awards are exempted

Did u know? There are some exceptions about tax rebate as follows:

1. Tax rebate of ` 12,000 on education per child to the maximum of two children
2. Rebate under Sections 88, 88A and 88B
3. Under section 88 the rebate will be available under the following items:
4. Payment of insurance premium for life of the individual, the wife/husband/any
child
5. Any contribution made to provident fund either EPF or approved superannuation
fund
6. Any deposit with the post office saving bank

7. National Saving Certifi cates
8. Unit Link Insurance Plan 1971 of UTI

9. Unit Link Insurance Plan of LIC mutual fund notified by Central Govt. under Section
10(23d)

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