FAQs
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​What is considered as salary income?

​​​​ section 17​​ of the Income-tax Act defines the term ‘salary’. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary.

​What are allowances? Are all allowances taxable? | What are Perquisites? | How they are taxed? | How to get exemption for uniform allowance?​

Allowances are fixed periodic amounts, apart from salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee.  E.g., Tiffin allowance, uniform allowance, etc.

There are generally three types of allowances for the purpose of Income-tax Act - taxable allowances, fully exempted allowances and partially exempted allowances.​ 

Perquisites are benefits received by a person as a result of his/her official position and are over and above the salary or wages. These fringe benefits or perquisites can be taxable or non-taxable depending upon their nature. . Uniform allowance is exempt to the extent of expenditure incurred for official purposes U/S 10(14).

​My employer reimburses to me all my expenses on grocery and children’s education. Would these be considered as my income?

​Yes, these are in the nature of perquisites and should be valued as per the rules prescribed in this behalf.​​

​Even if no taxes have been deducted from salary, is there any need for my employer to issue Form-16 to me?

​​Form-16 is a certificate of TDS. In your case it will not apply. However, your employer can issue a salary statement.​

​Is pension income taxed as salary income?

​Yes. However, pension received from the United Nations Organisation is exempt.​​

​Is Family pension taxed as salary income?

​No, it is taxable as income from other sources.​

​Are retirement benefits like PF and Gratuity taxable?

​​In the hands of a Government employee Gratuity and PF receipts on retirement are exempt from tax. In the hands of non-Government employee, gratuity is exempt subject to the limits prescribed in this regard and PF receipts are exempt from tax, if the same are received from a recognised PF after rendering continuous service of not less than 5 years.​

​Are arrears of salary taxable?

​​​​Yes. However, the benefit of spread over of income to the years to which it relates to can be availed for lower incidence of tax. This is called as relief u/s 89​ of the Income-tax Act.​​


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