The Income-tax Act, 1961

CHAPTER IV

COMPUTATION OF TOTAL INCOME

HEADS OF INCOME

"Salary", "perquisite" and "profits in lieu of salary" defined.

17. For the purposes of sections 15 and 16 and of this section,—

(1) "salary" includes

(i) wages ;

(ii) any annuity or pension ;

(iii) any gratuity ;

(iv) any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages ;

(v) any advance of salary ;

(vi) the annual accretion to the balance at the credit of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under rule 6 of Part A of the Fourth Schedule ; and

(vii) the aggregate of all sums that are comprised in the transferred balance as referred to in sub-rule (2) of rule 11 of Part A of the Fourth Schedule of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under sub-rule (4) thereof;

* (2) "perquisite" includes—

(i) the value of rent-free accommodation provided to the assessee by his employer ;

(ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer ;

(iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases—

(a) by a company to an employee who is a director thereof;

(b) by a company to an employee being a person who has a substantial interest in the company ;

(c) by any employer (including a company) to an employee to whom the provisions of paragraphs (a) and (b) of this subclause do not apply and whose income under the head "Salaries", exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds eighteen thousand rupees

(iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee ; and

(v) any sum payable by the employer, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund ¹[or a Deposit-linked Insurance Fund established under section 3G of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948), or, as the case may be, section 6C of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952)], to effect an assurance on the life of the assessee or to effect a contract for an annuity ;

(3) "profits in lieu of salary" includes—

(i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto ;

(ii) any payment [other than any payment referred to in clause (10), clause (10A), ²[clause (10B), ] clause (11), clause (12) or clause (13A)' of section 10], due to or received by an assessee from an employer or a former employer or from a provident or other fund (not being an approved superannuation fund), to the extent to which it does not consist of contributions by the assessee or interest on such contributions.

* For valuation of perquisite, see rule 3.

1. Inserted by the Labour Provident Fund Laws (Amendment) Act, 1976, w.e.f. 1-8-1976.

2. Inserted by the Finance Act, 1975, w.e.f. 1-4-1976.