Determination of Salary Income- Limits for the purposes of
Section 10(13A)
Rule 2A of Income Tax Rules 1962 defines limits for the purpose
of salary income determination by considering the amount of
allowance received by the assessee in respect of relevant period
or the amount of actual expenses incurred by the assessee.
Provisions in Income Tax Rules 1962 related to Rule 2A is as
under:
Determination of Income
A.-Salaries
Limits for the purposes of section 10(13A).
2A. The amount which is not to be included in the total income
of an assessee in respect of the special allowance referred to
in clause (13A) of section 10 shall be-
(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 in respect of the relevant period; or
(c) an amount equal to-
(i) where such accommodation is situate at Bombay, Calcutta,
Delhi or Madras, one-half of the amount of salary due to the
assessee in respect of the relevant period; and
(ii) where such accommodation is situate at any other place,
two-fifth of the amount of salary due to the assessee in respect
of the relevant period,
whichever is the least.
Explanation : In this rule-
(i) "salary" shall have the meaning assigned to it in clause (h)
of rule 2 of Part A of the Fourth Schedule;
(ii) "relevant period" means the period during which the said
accommodation was occupied by the assessee during the previous
year.
Rule 1 of Income Tax Rule 1962 - Short Title and Commencement
Rule 2 of Income Tax Rule 1962 - Definitions of Income Tax Rules
Rule 2A Limits for the Purposes of Salary income Income Tax Rules 1962
Rule 3 Valuation of Perquisites to employees and Tax on Perquisites: Rule 3 of Income Tax Rules 1962
Rule 4 Unrealized rent of Income from House Property: Rule 4 of Income Tax Rules 1962
Rule 5AA Prescribed authority for Investment Allowance: Rule 5AA of Income Tax Rules 1962