(1) The income chargeable under the head “Salaries” shall be computed after making the deductions in respect of sums of the nature mentioned in column B of the following Table, not exceeding the amount as mentioned in column C thereof: Table Sl. No. Nature of sum Amount of deduction A B C 1. Sum paid by the assessee as a tax on Entire amount. employment as per article 276(2) of the Constitution, leviable by or under any law. 2. Standard deduction. (a) ₹ 75000 or the salary, whichever is less, where income- tax is computed under section 202(1); (b) ₹ 50000 or the salary, whichever is less, in any other case. 3. Death-cum-retirement gratuity Entire amount. received as referred to in sub- section (2)(g). 4. Payment of retiring gratuity Entire amount. received under the Pension Code or Regulations applicable to the members of the defence services. 5. Gratuity received under the Payment Amount received, as restricted of Gratuity Act, 1972 (39 of 1972). to the amount calculated as per the provisions of section 4(2) and (3) of the said Act. 6. Any other gratuity received by an Amount being minimum of— employee— (a) actual gratuity received; (i) on his retirement; or (b) amount specified by the (ii) on his becoming incapacitated Central Government, by before such retirement; or notification, having regard to (iii) on termination of his the limit applicable in this employment. behalf to the employees of the Central Government; and (c) half month’s salary for each completed year of service,
CH. IV B.- SALARIES [Sec 15-19] Sl. No. Nature of sum Amount of deduction A B C calculated as under:— 1 Amount = (A x B) 2 where,— A = average salary for ten months immediately preceding the month when any such event occurs; B = number of such completed years. 7. Payment in commutation of Entire amount. pension received— (a) under the Civil Pensions (Commutation) Rules of the Central Government; or (b) under any similar scheme applicable to–– (i) the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union, [such members or holders not covered under (a)]; (ii) the members of the all-India services; (iii) the members of the defence services; (iv) the members of the civil services of a State, or the holders of civil posts under a State; or (v) the employees of a local authority or a corporation established by a Central Act or State Act or Provincial Act. 8. Payment in commutation of The commuted value shall be pension is received under any determined having regard to the scheme from any other employer. age of the recipient, the state of his health, the rate of interest and
Sl. No. Nature of sum Amount of deduction A B C officially recognised tables of mortality, and— (a) where the employee has received gratuity, the commuted value of one-third of the pension, which he is normally entitled to receive; and (b) in any other case, the commuted value of one-half of such pension. 9. Payment in commutation of Entire amount. pension received from a fund as specified in Schedule VII (Table: Sl. No. 3). 10. Compensation received by a Minimum of— workman at the time of his (a) compensation received; retrenchment— (b) amount calculated as per provisions of section (a) under the Industrial Disputes 25F(b) of the Industrial Act, 1947 (14 of 1947); or Disputes Act, 1947 (14 of (b) under any other Act or 1947); rules, orders or notifications issued (c) such amount, not being thereunder; or less than ₹50000, as may be (c) under any standing orders; or notified by the Central Government. (d) under any award, contract of service or otherwise. 11. In case of compensation referred Compensation received. to in Sl. No. 10, where such compensation received is in accordance with any scheme which the Central Government may approve in this behalf, having regard to–– (a) the need for extending special protection to the workmen in the undertaking to which such scheme applies; and (b) other relevant circumstances. 12. Amount received or receivable on Minimum of— voluntary retirement or termination
CH. IV B.- SALARIES [Sec 15-19] Sl. No. Nature of sum Amount of deduction A B C of service under a scheme or schemes of voluntary retirement, by (a) compensation received; an employee as referred to in sub- and section (2)(h). (b) ₹ 500000. 13. Payment received by an Entire amount. employee of the Central Government or a State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise.