This document discusses various elements of income from salaries that are taxable or exempt from taxation under the Income Tax Act. It covers different types of allowances like dearness allowance, house rent allowance, medical allowance, children education allowance, special allowances and other location-based allowances. It provides details on tax treatment of each allowance and limits of exemption available. The document appears to be teaching content for a tax accounting course on income from salaries.

1. 1www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

2. 2www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

3. 3www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

4. 4www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
ELEMENTS OF SALARY
 minimum
remuneration
 payable on
monthly basis
fully taxable
taxable on
receipt basis
 fully taxable

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
fixed sum of money
 cash payment
 for a particular expenditure

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
• fully taxable
• irrespective of actual medical
expenses incurred by the
employee
Medical
Allowance
• Exempt up to actual amount
received per child
• or Rs. 100 p.m. per child
• up to a maximum of 2 children
• whichever is less
Children
education
allowance

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
• Fully taxable
Dearness
Allowance/
Dearness Pay
Types
of
DA
DA [forming
part of salary
for the purpose
of retirement
benefits]
DA [not forming
part of salary]
DA [partially
forming part of
salary]

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
• HRA is exempt to
the minimum of the
following:
• 50%/40% of salary
or
• HRA or
• Rent (-) 10% of
salary
House
Rent
allowance

10. 10www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
SPECIAL
ALLOWANCES
U/S 10(14)
Travelling
allowance/
Transfer
allowance Daily
allowance
Conveyance
allowance
Helper
allowance
Research
allowance
Uniform
Allowance
 Special Allowances are exempt to the extent of
official expenditures

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

13. 13www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214
CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES
• Exemption varies from
Rs. 200 per month to
Rs. 1,300 p.m.
• depending upon
different specified
areas.
Border area
allowance,
Remote area
allowance,
difficult area
allowance or
disturbed area
allowance
• The exemption is upto
Rs. 3,900 per month
Counter –
insurgency
allowance

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES

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CHAPTER-3 [INCOME FROM SALARIES] NEERAJ GUPTA CA IPCC TAX CLASSES