Limits for the purposes of Schedule III [Table: Sl. No. 11] to the Act.
279. (1) The amount, which is not to be included in the total income of an assessee in respect of the special allowance referred to in Schedule III [Table: Sl. No. 11] to the Act, shall be the least of the following:
| (a) | the actual amount of such allowance received by the assessee in respect of the relevant period; or | |
| (b) | the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee for the relevant period; or | |
| (c) | in case of an assessee employed in the location mentioned in column B of the following Table, an amount equal to such percentage of salary, mentioned in column C thereof, due to the assessee in respect of the relevant period:— |
TABLE
| Sl. No. | Location of residential accommodation | Percentage of salary |
| A | B | C |
| 1. | Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. | 50% |
| 2. | Any other place. | 40% |
(2) In this rule,—
| (a) | "relevant period" means the period during which the said accommodation was occupied by the assessee during the tax year; and | |
| (b) | "salary" includes dearness allowance, if provided for under the terms of employment, but excludes all other allowances and perquisites. |