Section 10(45): Income Tax Exemption for UPSC Chairman and Members
Section 10(45) of the Income-tax Act, 1961 provided an exemption for specified allowances and perquisites granted to serving and former Chairmen and members of the Union Public Service Commission (UPSC). The exemption applies only to benefits notified by the Central Government in the Official Gazette.
Eligible persons: Chairman and members of the UPSC, including retired Chairmen and retired members.
Nature of income: Specified allowances and perquisites.
Exempt amount: The qualifying notified benefit, subject to the notification.
Key requirement: Central Government notification in the Official Gazette.
Historical applicability: The provision was introduced with retrospective effect from 1 April 2008.
What is Section 10(45) of the Income-tax Act?
Under the Income-tax Act, 1961, Section 10(45) excluded from total income any allowance or perquisite, as may be notified by the Central Government in the Official Gazette, paid to the Chairman or a retired Chairman or any other member or retired member of the Union Public Service Commission.
This is a targeted statutory exemption. It does not make every payment to a UPSC officeholder tax-free. The identity of the recipient, the nature of the benefit and the terms of the relevant government notification must all be checked.
Meaning of important terms
Union Public Service Commission (UPSC)
The UPSC is the constitutional public service commission for the Union, established under Article 315 of the Constitution of India. Its functions are described principally in Article 320. The constitutional status of the Commission does not, by itself, exempt every receipt of its members from income tax.
Allowance
An allowance is generally a payment made to meet a particular expense or as an additional employment-related benefit. Its tax treatment depends on the nature of the payment and the applicable statutory exemption.
Perquisite
A perquisite is a benefit or facility received by reason of an office or employment, potentially including non-cash benefits. The historical definition and valuation framework for salary perquisites appear in Section 17(2) and the applicable Income-tax Rules. Section 10(45) provides a special exemption for the notified benefits of the specified UPSC officeholders.
Who is eligible and what is exempt?
| Eligible assessee | UPSC Chairman, retired Chairman, serving member or retired member. |
|---|---|
| Qualifying income | Allowances and perquisites specifically notified by the Central Government in the Official Gazette. |
| Extent of exemption | The full qualifying amount or value to the extent covered by the applicable notification; no blanket exemption for unrelated payments. |
| Effective date under the historical law | Retrospectively from 1 April 2008, subject to the relevant law and notification. |
| Important exclusion | Ordinary salary, pension, honorarium or other receipts are not automatically exempt merely because the recipient holds or formerly held a UPSC office. |
Conditions for claiming exemption under Section 10(45)
- Eligible officeholder: The recipient must be the Chairman or a member of the UPSC, or a retired Chairman or retired member.
- Notified benefit: The payment or facility must be an allowance or perquisite included in a Central Government notification issued under the provision.
- Notification terms: Any description, limitation, eligibility requirement or effective date stated in the notification must be satisfied.
- Supporting records: The recipient should retain the notification reference, payment advice and benefit particulars supporting the exemption.
- Correct tax year: Apply the law and notification in force for the year to which the payment relates.
Does the exemption cover the entire amount?
Where an allowance or perquisite is fully covered by the applicable notification and all conditions are satisfied, the qualifying amount or value is excluded from total income under historical Section 10(45). The statutory wording does not establish a single general monetary cap, but the scope of each notification controls what is exempt.
Example: A retired UPSC member receives a facility expressly covered by a valid Central Government notification under Section 10(45). The value of that facility may be exempt to the extent specified. A separate payment not covered by the notification must be assessed under the ordinary applicable income-tax rules.
Tax treatment of other UPSC payments
Salary and other remuneration generally require examination under the applicable provisions governing income from employment or other relevant heads of income. Retirement benefits and pensions have separate tax rules. Exemptions, if any, must be established independently rather than inferred from Section 10(45).
For general background on the valuation of non-cash employment benefits, see valuation of residential accommodation perquisites and valuation of motor car perquisites. Those general rules do not override a valid specific exemption.
Position under the Income-tax Act, 2025
The reference Section 10(45) belongs to the Income-tax Act, 1961. The Income-tax Act, 2025 took effect on 1 April 2026. For tax years beginning on or after that date, taxpayers should consult the corresponding provisions of the 2025 Act, the relevant notifications and applicable transitional rules. For earlier periods, the historical provision and amendments for that year remain relevant.
Practical compliance checklist
- Confirm whether the recipient was a serving or retired UPSC Chairman or member.
- Identify the exact allowance or perquisite received.
- Locate the relevant Central Government Official Gazette notification and check its effective date.
- Verify that the specific benefit falls within the notified description.
- Retain payment records and documentation for the applicable tax year.
- Review all other remuneration and retirement receipts separately.
Frequently asked questions
Who can claim the historical Section 10(45) exemption?
Serving and retired Chairmen and members of the Union Public Service Commission, but only for notified allowances or perquisites.
Are all UPSC allowances tax-free?
No. The Central Government must have notified the particular allowance or perquisite in the Official Gazette.
Is the salary of a UPSC member exempt?
Section 10(45) does not provide a blanket salary exemption. Salary must be examined under the general applicable rules.
Are former UPSC members included?
Yes. The historical provision expressly refers to retired Chairmen and retired members.
Is there a fixed exemption ceiling?
The historical provision does not prescribe one general rupee ceiling, but the benefit must fall within the scope and conditions of the notification.
Official legal references
- India Code - official texts of the Income-tax Acts and Constitution of India.
- Income Tax Department - income-tax legislation, circulars and notifications.
- e-Gazette of India - search for the applicable Central Government notification.
- Union Public Service Commission - official institutional information.
- Income Tax e-Filing Portal - official filing guidance.
Related reading: income exempt under Section 10, tax-exempt income explained, Chapter VI-A deductions and official income-tax return filing software.
Educational information. The applicable statute, Gazette notification and tax year determine the availability and extent of the exemption.