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Computation of 'Profit in Lieu of Salary' (Sec-17(3)


(i)         The amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with...

-(A) the termination of his employment or

-(B) the modification of the terms and conditions relating thereto;

(ii)        Any payment due to or received by an assessee..

-(A) from an employer or a former employer or

-(B) from a provident or other fund to the extent to which it does not consist of contributions by the assessee or Interest on such contribution or

-(C) any sum received under a Keyman  Insurance Policy including the sum allocated by way of bonus on such policy;

(iii)any amount due to or received, whether in lump sum or otherwise, by any assessee from any person –

(A) before his joining any employment with that person; or

(B) after cessation of his employment with that person.]

exceptions: - the following receipts will not be considered for these clauses.

-          any death cum  gratuity; it is chargeable under section 17(1) (iii).

-          Commuted value of pension; it is chargeable under section 17(1) (ii).

-          Retrenchment compensation: - it is chargeable under sub section (i) of section 17(3) above.

-          Payment from a statutory provident fund:- a provident fund to which provident fund act, 1925 applies or has been set up and notified by the central government, such receipt is fully exempt u/s 10(11).

Allowances Under Section-10 & 17(3) under Head 'Salary' Income
Chart Showing Computation of 'Salary' Income
Computation of 'Gross Salary' Income
Computation of 'Net Salary' Income :
Deduction under Chapter VI-A

Retirement Benefits

1.       Major Retirement benefits gets by the Employee

2.       Tax Treatment of ‘Leave Encashment’

3.       Tax Treatment of ‘Gratuity’

4.       Tax Treatment of ‘Pension’
Other Benefits & Facilities gets by the Salaried Employees
Arrear of Salary and relief under section 89(1)
Deduction Under Section 80 C ( How to Find Out)
Exemption Specified in Income Tax Rules in 'Salary' Income
'Perquisies' and 'Income Tax - ( Taxable and Exempted) - Salary :
Computation of 'Profit in Lieu of Salary' (Sec-17(3)
Computation of Income Under Head 'Salaries' under Income Tax
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