Partly Exempted Incomes

Partly Exempted Incomes

• Leave Travel Concession
• Payment For Voluntary Retirement
• Gratuity
• Pension
• Leave encashment
• Retrenchment compensation

LEAVE TRAVEL CONCESSION [s.10(5)]

• Granted by employer to employee and/or his family
• Meaning of “Family”

• the spouse and children of the employees
• parents, brothers and sisters of the employees, who are wholly or mainly dependent upon him
• tax exemption benefit shall not be available to more than two surviving children after 1 October, 1998 (restriction not applicable to children born before 1 October, 1998 and multiple births after one child)

• On leave to any place in India; period/ purpose of leave immaterial
• After retirement/ termination of service, for proceeding to any place in India
• Exemption not to exceed actual expenditure; expenditure on boarding and lodging not covered

LTC : EXEMPTIONS 

The exemption is subject to rule 2B:

1. The exemption referred  to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986.

• 1986-89
• 1990-93
• 1994-97
• 1998-2001
• 2002-05
• 2006-09
• 2010-13
• 2014-17

1. Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in  respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of our calendar years shall be eligible for exemption.

Explanation : The amount in respect of the value of the travel concession or assistance referred to in this sub-rule shall not be taken into account in determining the eligibility of the amount in respect of the value of the travel concession or assistance in relating to the number of journeys under sub-rule (2).

Quantum of exemption:

• Where the journey is performed by air, amount not exceeding the economy class air fare by the shortest route to destination;

• Where the places are connected by rail and the journey is performed by any mode of transport other than by air, an amount not exceeding AC First Class rail fare by the shortest route to destination;
• Where the places of origin and destination or part thereof are not connected by rail and the journey is performed between such places:

1. by a recognized public transport, an amount not exceeding I Class or deluxe class fare on such transport by the shortest route to destination; and
2. where no such recognized public transport exists, an amount equivalent to the AC First Class rail fare, for the distance for the journey by the shortest route, as if journey has been performed by rail.

PAYMENT FOR VOLUNTARY RETIREMENT S. 10 (10C)

Clause 10 (10(C)) grants exemption to an employee of