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Prepared By:
Reena Ahuja (08061)
Sulabh Maheta (08084)
Amin Pattani (08100)
 alue of Leave Travel
Concession in India [Sec. 10(5)]
Õ LTC received by employees from their
employers for preceding to any place in India.

Õ The benefit is available to individuals - citizens

as well as non citizens.

Õ Limit of exemptions

Õ Monetary limits
a ample:

Mr. X went on holiday on 25.12.2006 to Delhi

with his wife and three children (one son ± age 5
years; twin daughters - age 2 years). They went
by flight (economy class) and the total cost of
tickets reimbursed by his employer was
Rs60,000 (Rs45,000 for adults and 15,000 for
the three minor children).
And
If among his three children the twins were 5
years old and the son 3 years old.
 a emption in the case of
individuals, who are not citizens
of India [Section 10(6)]

(i) Section 10(6)(ii) grants exemption to a

person in respect of the remuneration
received by him for services as high
commission, legation, consulate or the trade
representation of a foreign State or as a
member of the staff of any of these officials.
Cont«..

Conditions:

(a) The remuneration received by our

corresponding Government officers resident
in such foreign countries should be exempt.

(b) The above ± mentioned officers should be

the subjects of the respective countries and
should not be engaged in any other
business or profession or employment in
India.
(ii) Section 10
10((6)(vi) provides that remuneration
received by a foreign national as an employee of
a foreign enterprise for service rendered by him
during his stay in India is also exempt from tax
tax..

Condition:
(1) the foreign enterprise is not engaged in a
business activity in India.
(2) The employee¶s stay in India does not exceed
a total of 90 days in the previous year;
(3) the remuneration is not liable to be deducted
from the employer¶s income chargeable to tax
under the Act.
(iii) section 10(6)(viii) provides that employee who is also
non-resident for services rendered
in connection with his employment
on a foreign ship where his total
stay in India does not exceed a
total of 90 days in the previous
year.
(iv) Section 10(6)(xi) provides that any remuneration
received by employees of foreign
Government from their respective
Government during their stay in
India in connection with their
training in any establishment or
office of the Government or any
public sector undertaking is
exempt from tax.
 Allowances payable outside India
[Sec. 10(7)]

Allowances or perquisites paid or allowed

as such outside India by the Government
to a citizen of India for services rendered
outside India are exempt from tax.
tax.
 Co-operative technical assistance
programmers [Section 10(8) and 10(9)]

Individuals who are assigned duties in India in

connection with any co-operative technical assistance
programs and projects would be exempt from tax on
their receipts by way of:

(a) Remuneration received directly or indirectly from the

Government of a foreign State for rendering such
services;

(b) Any other income accruing or arising outside India in

respect of which the individual is required to pay
income tax or other social security tax to the
Government of that foreign State.
 Consultant remuneration
[sec. 10(8A) and (8B)]
Únder clause (8A), any remuneration or fee received by
a consultant, directly or indirectly, out of the funds made
available to an international organization (agency) under
a technical assistance grant agreement with the agency
and Government of the foreign state is exempted from
income tax.

Únder clause (8B), the remuneration received by an

employee of the consultant is exempted from income tax
provided such employee is either not a citizen of India
or, being a citizen of India, is resident but not ordinarily
resident and the contract of his service is approved by
the prescribed authority before the commencement of
his service.
 Úratuity [Sec. 10(10)]

1) Retirement gratuity received under the

Pension Code Regulations applicable to
members of the Defence Service is fully
exempt from tax.
2) Central / State Government Employees
3) Non government employees covered by the
Payment of Gratuity Act, 1972
4) Non government employees not covered by
the Payment of Gratuity Act, 1972
 a ample:
Mr. X retired on 15.06.2006 after completion of
26 years 8 months of service and received
gratuity of Rs. 6 lakh. At the time of retirement
his salary was;

Basic salary: Rs. 5000 p.m.

D.A. : Rs.3000 p.m.

Find his taxable gratuity assuming;

1. He is non-government employee and
covered by the payment of gratuity act 1972
2. He is non-government employee and no
covered by the payment of gratuity act 1972
3. He is a government employee
 Payment of commutation of
pension [Sec. 10(10A)]
Pension is of 2 types

1. Commuted Pension
2. Ún-commuted Pension

A) Employees of the central government/local

authorities/statutory corporation/members of
the defence services
B) Non government employee
 a ample

Mr. X retired on 01.10.06 receiving Rs. 5000

p.m. as pension. On 01.02.07, he commuted
60% of his pension and received Rs. 3 lakh as
commuted pension. Required to compute his
taxable pension assuming:
1) He is government employee
2) He is non government employee, receiving
gratuity of Rs. 5 lakh at the time of
retirement
3) He is non government employee and is in
receipt of no gratuity at the time of
retirement