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Last modified / updated Feb. 04, 2016

Income Tax Act, 1961 : Income Exempted and Chargeable under the Head "Salaries"

19. Leave Travel Concession (LTC) - under Section 10(5)

The value of any travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India or (b) after retirement from service, or, after termination of service to any place in India is exempt under Section 10(5) subject, however, to the conditions prescribed in Rule 2B of the Rules.

For the purpose of this clause, "family" in relation to an individual means:

(i) the spouse and children of the individual; and
(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.
(iii) The exemption under this section is allowed for two journeys made in the block of four years (Block starts from 1986)

It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.

Any Leave encashed for the purpose of Leave travel or home travel concession is taxable.

20. Death-cum-retirement gratuity - under Section 10(10)

Death-cum-retirement gratuity or any other gratuity is exempt to the extent specified from inclusion in computing the total income under Section 10(10). Any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence service. Gratuity received in cases other than those mentioned above, on retirement, termination etc is exempt up to the limit as prescribed by the Board. Presently the limit is Rs. 10 lakhs w.e.f. 24.05.2010 [Notification no. 43/2010 S.O. 1414(E) F.No. 200/33/2009-ITA-1 dated 11th June 2010].

Links & Description of Contents

Scheme of Tax Deduction at Source from "Salaries"Income Chargeable under - "Salaries"Income Exempted Under The Head "SALARIES"
1 - Section 192 Provisions on Taxable Income
2 - Relief When Salary Paid in Arrear or Advance
3 - Claim of Deduction of Interest u/s 24 (b)- Income from House Property
4 - Due dates for payment of TDS
5 - Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted
6 - Certificate for Tax Deducted (Section 203)
8 -Furnishing Particulars pertaining to perquisites
9 - Mandatory Quoting of PAN and TAN
10 - TDS on Income from Pension
11 - Income Chargeable Under the Head "Salaries"
12 - Definition OF "Salary"
13 - Perquisite - Rent Free Accomodation & Motor car provided by the Employer
14 - Perquisite - Gas, electricity & water for household consumption
15 - Interest free or concessional loans
16 - Value of Subsidized / Free food / non-alcoholic beverages
17- Transfer Grant Allowance
18 - Medical Reimbursement by the Employer
19 - Leave Travel Concession (LTC)
20 - Death-cum-Retirement Gratuity
21 - Commutation of Pension
22 - Leave Encashment
23- Retrenchment Compensation
24 - Amount received on voluntary retirement
25 - Sum received under a Life Insurance Policy
26 - Payment from a Provident Fund
27 - House Rent Allowance
28 - Pension to Gallantry Awarded
29 - Medical Treatment provided by Employer
30 - Entertainment Allowance
31 - Professional Tax Contents Highlights