Allowances , Deductions and Perquisites

For the Financial year 2017-18 , this post shall highlight on the Allowances,Deductions  and Perquisites .We have already gone through the details required for filing Income tax return for salaried persons .For your reference you can visit to the posts from the related post section.For filing the salary return other than the Salary Details from the employer following details are also required to be filed

Allowances Exempt and taxable


Facilities in the nature of Perks and their valuation

Any amount received in the nature of salary

Retirement related amount and the deductions if any

Any arrears received and the taxable part if any

Now each of the 6 amounts mentioned requires a detailed understanding .In this post we will try to explain each and every part separately though they are required to be filed in a single form

Allowances :

These are amounts that are exempt to a certain extent as provided under sec 10 of Income tax act which are paid by the employer as a part of salary.Some of them are exempt in full and some are deductible from salary since they are provided by the employer on reimbursable basis.One should keep in mind that from this year all reimbursable amount or the tax exempt allowance can be verified so any receipts, proof ,bills etc that you submit to your employer should have credible supporting as they will be cross verified.Below is given a detailed table containing the allowances, extent of exemption and any other related conditions if any.

Additions to Salary:

There are amounts which are taxable under the head of salary with certain reliefs Examples are  Arrear salary, Salary received by foreign delegates while working in India,Compensation received by widow etc.These have certain threshold of exempt amount .Given under are the details of all such amount that a person may receive under the head salary


There are certain facilities which are provided by an employer to an employee which if not so provided would have been met with by the employee from his/her own resources.Examples are Car,Furnished accomodation, Servant etc.In these cases Income tax provide that a fair amount of valuation be added to the salary of employee.Hence tax liability gets enhanced by this value .Given under are the details of these possible facilities

Last but not least remains are the deductions under chapter VI which are allowed for the investment made under various instruments .The total of these investments is deductible from the taxable income subject to various deductions and caveats which are given hereunder:

Deductions allowed under Sec 80C,80CCC,80CCD

Other Deductions

We hope we have provided all the details required for an Individual to file the salary return .In case of any query mail us at or you an drop your query at our query link or at



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.