Taxation Procedures &

Practices
SYBMS – Sem III
 Introduction – THE INCOME TAX ACT, 1961
• Under the Constitution of India,
Central Government has the right to
collect Income Tax
• Taxes are collected for the
development & defence of the
country
• The law governing such collection of
tax is
- specified in the IT Act, 1961
- Implemented thru circulars
issued by CBDT
- Interpreted by the judgements of
the Supreme Court and High Courts
which settles the legal disputes
between Govt. & tax payers
 Scheme of the Act

Thus, S.17(2)(c)(i) means Section 17, Sub section 2,

clause c & sub clause i,
Any amendment in the Act is made thru the Finance
Act (Budget) passed every year,
Income Tax Act, 1961 extends to whole of India (sec. 1)
Basic Concepts (Sec 1 to 4) Charge of Income Tax (Sec. 4)

U/s 2 • Income tax shall be charged

• Assessment Year • At the rates laid down by the
• Person Finance Act
• Income • For the assessment year
• Assessment • In accordance with and
subject to the provisions of
• Assessee this act
U/s 3 • In respect of total income
• Previous Year (Sec 3) • Of the previous year
• Of every person
 Definitions
• 1. ASSESSEE – u/s 2 (7) :

• “An Assessee means a person

by whom any tax or any other
sum of money is payable under
the Act.”
Thus Assessee means
• A person by whom any tax,
interest, penalty etc. is payable /
due.
• A person whose assessment of
income, loss or refund is
pending.
• A deemed assessee or
representative assessee etc.
• Assessee –in- default
• 2. ASSESSMENT – u/s 2 (8) :

• “ An assessment includes re-

assessment.”

• This is an inclusive definition

• The term assessment includes
re-assessment
• Assessment means the process
of determining and computing
the amount of income and the
tax due or payable.
3. ASSESSMENT YEAR – u/s 2 (9) :

• “ The period of twelve months

commencing on the first day of April
every year.”

• An assessment year begins on 1st April

every year and ends on 31st March of
next year.
• The year in which income is taxed is
called assessment year.
• Financial year means the period of 12
months from 1st April to the 31st March
of next year.
• Thus the total income of a person during
the financial year (previous year) 2015-
16 will be taxed in the next financial
year ( assessment year ) 2016-17.
 4. PERSON – u/s 2 (31) :
• “Person” includes –
• An Individual
• A Hindu Undivided Family
• A Company
• A Firm
• An Association of persons or
body of individuals, whether
incorporated or not
• A Local Authority and
• Every artificial juridical
person, not covered in the
above categories.”
 INDIVIDUAL
• Income earned by every
person is taxed
• A person is classified into
above mentioned
categories
• Individual means a natural
person i.e. human being
 Hindu Undivided
Family (HUF)
• HUF consists of all
persons lineally
descended (direct
transmission by
inheritance) from a
Hindu ancestor
(forefather) their wives
and unmarried
daughters.
• COMPANY
• A company means an Indian co.,
Foreign Co., or any entity
assessed as co.,
• FIRM
• A firm is taxable entity distinct /
separate from its partners
• ASSOCIATION OF PERSONS
(AOP)
• AOP means an association in
which two or more persons join
in for common purpose or to
earn income.
• BODY OF INDIVIDUALS
(BOI)
• BOI means a team of individuals
carrying on some activity with
the object of earning income.
• LOCAL AUTHORITY
• Local authority means
a municipality, a
district board or any
other authority legally
entitled to control or
manage a municipal or
local fund
• Artificial Juridical
Person
• Artificial Juridical
Person means any entity
having a separate legal
existence and which is
not covered under any of
the above categories. e.g.
A deity, an Idol, a
corporation established
under special act – LIC,
a university etc.
• Comments :
• Income earned by every person is taxed. A person is classified into above
mentioned categories
• Individual means a natural person i.e. human being
• HUF consists of all persons lineally descended (direct transmission by
inheritance) from a Hindu ancestor (forefather) their wives and unmarried
daughters.
• A company means an Indian co., Foreign Co., or any entity assessed as co.,
• A firm is taxable entity distinct / separate from its partners
• AOP means an association in which two or more persons join in for common
purpose or to earn income.
• BOI means a team of individuals carrying on some activity with the object of
earning income.
• Local authority means a municipality, a district board or any other authority
legally entitled to control or manage a municipal or local fund.
• Artificial Juridical Person means any entity having a separate legal existence
and which is not covered under any of the above categories. e.g. A deity, an
Idol, a corporation established under special act – LIC, a university etc.
• 5. COMPANY – u/s 2 (17) :
• Section 2 [17] of the Act defines “Company” as follows :
• Any Indian Company,
• Any body corporate incorporated under the laws of a country
outside India,
• Any institution, association or body which was assessed as a
company for any assessment year on or before 1.4.1970,
• Any institution, association or body whether incorporated or not
and whether Indian or not, which is declared by the Central
Board of Direct Taxes (CBDT) to be a company.
• Thus a company means:
• An Indian company, a foreign company or any entity assessed as
company on or before 1.4.1970 and
• An entity declared to be a company by the CBDT to be a
company.
 6. INCOME – u/s 2 (24) :

• As per section 2(24) of the Act the term “ Income” includes :

• Profits & Gains
• Dividends
• Voluntary Contributions received by charitable or religious trust or a
specified institution like scientific research association or sport association.
• Perquisites, Benefits or Allowances like rent free accommodation, profits in
lieu of salary, retrenchment compensation, entertainment allowance, dearness
allowance, provision of motor car etc.
• Export cash assistance received from government,
• Refund of customs or excise duty,
• Benefits or Perquisites received from business or profession i.e gifts
received by a doctor from a patient,
• Any interest, salary, bonus, commission or remuneration received or
receivable by a partner from a firm,
• Capital gains,
• Winnings from lotteries, crossword puzzles, card games, gambling or
betting, races including horse races,
• Any sum received under a key-man insurance policy.
• Comments :
• This is an inclusive definition
• Income means the amounts earned
by a person by way of salary, rent,
profits, fees, dividends, interest,
commission etc.
• A person gets income from many
sources such as salaries, properties,
business or profession, investment
in shares, fixed deposits etc.
• Income of any nature obtained from
whatsoever source is liable to be
taxed.
• Income may be in the form of
periodical return, in cash or in kind,
illegal income etc.
•
• 7. BUSINESS – u/s 2 (13 ) :
• “Business includes any trade, commerce
or manufacture or any adventure or
concern in the nature of trade, commerce
or manufacture.”
• This is an inclusive definition
• Any activity carried on with a view to
earn profit is covered
• Trade means exchange of goods &
services for money
• Commerce means regular activity of
trading on a large scale
• Manufacture means making of articles
by means of labour and/or machines
• Any transaction with a profit motive can
be called as adventure or concern.
8. ANNUAL VALUE – u/s 2 (2) • Comments :
• “Section 2 (2) defines annual • Reasonable letting value
value in relation to any property is the sum for which the
as, its annual value determined property might reasonably
by section 23.” be expected to be let from
year to year
• Section 23, in turn, defines • RLV is computed whether
annual value as – the property is actually let
or not
• the sum for which the property
might reasonably be expected to • Annual rent is applicable
let from year to year i.e. only if the property is
Reasonable Letting Value or actually let
• the annual rent received or • Annual rent means the
receivable by the owner in annual rent received or
respect of a property which is receivable
actually let
 Section 3

• 9. PREVIOUS YEAR – u/s 3 :

• “For the purposes of this Act, Previous Year means the financial
year immediately preceding the assessment year.”
• The year in which income is earned is called Previous year
• Income earned in one year (previous year) is taxed in the next
year (assessment year)
• Normally previous year begins from the 1St April of the financial
year
• If the business or profession is newly set up during the year then
the previous year shall be from the starting date of the business or
profession till the 31st March of the said FY.
• If a new business is set up on 1st June 2015 then the previous year
will be the period from 1st June, 2015 to 31st March, 2016 and
Assessment year will be 2016-2017.
Charge of Income Tax (Sec 4)
Scope of Total Income (Sec 5)
• Scope of income • Resident & Ordinarily
depends upon Resident – Entire Indian +
Foreign Income is taxable in
- Who earns the his hands
income (Resident or • Non Resident – Only Indian
Non Resident) Income is taxable in his
- When the income hands
arises (Previous year • Resident but not ordinarily
or not) resident – Indian Income +
- Where the income foreign income from business
controlled from India or a
arises (India or profession set up in India is
outside India) taxable in his hands
SCOPE OF INCOME – u/s 5
• The scope of income depends upon
• who earns the income - i.e. whether a resident in India
or non-resident
• when the income arises - i.e. whether in the previous
year or not
• where the income arises - i.e. in India or outside India.
• Thus scope of income depends upon residential status
as well as the place and year of accrual of income.
The term scope of income means which items of
income are included and which items are excluded
while computing tax liability. From the chart
mentioned earlier, there can be three broad categories
of persons.
 INDIAN INCOME FOREIGN INCOME
• If income is received or
deemed to be received in India
• Income is not received
during the previous year and at or not deemed to be
the same time it accrues or received in India and
arises or is deemed to accrue • Income does not accrue
or arise in India during the or arise or is not deemed
previous year.
to accrue or arise in
• If income is received or India
deemed to be received in India
during the previous year but it
accrues or arises outside India
during the previous year
• If income is received outside
India during the previous year
but it accrues or arises or is
deemed to accrue of arise in
India during the previous year.
• Resident and Ordinarily
Resident :
• He is taxable in respect of any
income during the previous
year
• Arising from whatever source
• Which is received or deemed
to be received in India or
outside India or
• Which is accrued or deemed
to be accrued in India or
outside India.
• In short the entire Indian +
Foreign income is taxable in
his hands.
• b. Non Resident :
• He is taxable in respect of
any income during the
previous year
• Arising from whatever
source
• Which is received or deemed
to be received in India or
• Which is accrued or deemed
to be accrued in India
• In short only Indian income
is taxable in his hands
• c. Resident but Not Ordinarily Resident :
• He is taxable in respect of any income
during the previous year
• Arising from whatever source
• Which is received or deemed to be received
in India or
• Which is accrued / earned or deemed to be
accrued / earned in India or
• Which is accrued or deemed to be accrued
outside India from a Business controlled
from India or a Profession set up in India
• In short Indian income + Foreign income
from business controlled from India or a
profession set up in India is taxable in his
hands.
• Deemed means assumed. Income deemed
to be received means income which is not
actually received in India but which is
assumed as received in India in the
previous year.
Section 7 – What is income deemed to be received in India
• Employer’s contribution to recognized provident fund in
excess of 12% of salary
• Interest credited to the recognized provident fund balance
at the credit of the assessee in excess of 9.50%
• The taxable transferred balance from unrecognized
provident fund (being the employers contribution and
interest thereon)
• The contribution made by the Central Government in the
previous year to the account of an employee under a
pension scheme referred to in serction 80 CCD
Section 8 – Dividend Income when chargeable to tax
• Final Dividend – it is included in the previos year in
which the dividend is declared by the company
• Interim Dividend – It is included in the previous year
in which the dividend is unconditionally made
available by the company. The date of declaration of
interim dividend is not important. The date on which it
is unconditionally made available by a company to a
shareholder should be taken in to consideration.
• Deemed Dividend – It is included in the previos year
in which such dividend is distributed or paid
Section 9 – Income Deemed to Accrue or Arise in India
• When the source of income is in India i.e income from any
property or asset in India
• Income through the transfer of a capital asset situated in India
• Income accruing or arising through or from any business
connection in India
• Income chargeable under the head “Salaries” earned for services
rendered in India . Income which falls under the head “Salaries”
shall be regarded as income earned in India if the income is
payable for – services rendered in India
• Salary paid by the government to a citizen of India for service
outside India. It may be noted that allowances and perquisites paid
outside India by the Govt. is exempt
• Dividend paid by an Indian company outside India
• Interest, Royalty and fees for technical services
RECEIPT V/s ACCRUAL - Income is said to be received when it
reaches the assessee; when the right to receive the income
becomes vested in the assessee, it is said to accrue or arise
Hope you are enjoying…..
Residential Status (Sec 6)
• A person is classified on
the basis of legal status
in to Individual, HUF,
Firm, AOP, BOI etc.
• A person may be further
classified on the basis of
residential status in to –
Resident in India and
Non-resident in India.
• Individuals and HUFs can
be further classified into
Ordinarily Resident or
Not Ordinarily Resident.
• Basic Conditions for Individuals :
• Resident in India : - An individual is said to be resident in India in any previous year if
he satisfies one of the following two basic conditions

• He is in India, during that previous year, for a period of 182 days or more OR
• He is in India, during that previous year, for a period of 60 days or more AND he is in
India for 365 days or more during the 4 years immediately preceding the previous
year
•
• Exception : Exception for rule of stay in India for a period of 60 days above in 2 nd
condition is as follows.

• A citizen of India or a member of a crew of an Indian ship, who leaves India in the
previous year for the purpose of employment, becomes a resident only if he stays in
India for 182 days or more during the year & not 60 days.

• A citizen of India or a person of Indian origin, who being outside India, comes on a
visit to India, in the previous year becomes a resident only if he stays in India for 182
days or more during the year & not 60 days.

• Non -Resident : An individual who does not satisfy any of the above conditions is
called a non resident.
• Ordinarily Resident : An individual who is Resident
in India is treated as Ordinarily Resident if he satisfies
the following two conditions.
• He has been a resident in India for at least 2 out of 10
years immediately preceding the previous year AND
• He has been in India for a period of 730 days or more
during 7 years immediately preceding the previous
year.

• Not Ordinarily Resident : An individual who is

resident according to the basic conditions but does not
satisfy further 2 conditions of ordinarily resident is
known as Not–Ordinarily Resident.
• HUF, AOP, A Firm will be resident if its management &
control is situated wholly or partly in India during that
previous year and will be Non-resident if its management &
control is situated wholly outside India during that previous
year.

• HUF to be treated as Ordinarily Resident or Not

Ordinarily Resident depends upon the residential status of
Karta. For this purpose same conditions are applicable as for
Individual.

• Company is said to be Resident in India in any previous

year if
• It is an Indian Company or
• During the previous year the control & management of its
affairs is situated wholly in India
Non Taxable Incomes (Sec 10)
• Agriculture Income
• Any sum received by a co-parcener from HUF
• Share of income from the firm
• Interest paid to non resident
• Perquisites and allowances paid by Govt. to its
employees serving outside India
• Gratuity
• Commuted value of pension received
• Compensation received in case of any disaster
• Any sum received under a life insurance policy
• Payment from Statutory Provident Fund
• Payment form recognised fund
• Payment from superannuation fund
• House Rent Allowance
• Scholarship
• Allowance of MP/MLA
• Income of local authority
• Income of news agency
NON TAXABLE INCOMES U/S 10
• 1. Agricultural Income – u/s 10 (1) :
• Rent or revenue derived from land which is situated in
India and is used for agricultural purposes
• Any Income derived from such land by basic agricultural
operations like cultivation, growing crops, digging,
removal etc. Income earned from carrying nursery
operations is treated as agricultural income.
• However income from sale of trees, breeding of
livestock, fishing activities, poultry farming cannot be
treated as agricultural income.
• Although agricultural income is not taxable, it is included
in determining the rate of tax, if the net agricultural
income of an assessee exceeds Rs.5000/- and assessee
has non agricultural income excceding the amount of
threshold exemption limit which is Rs.250000/- for AY
16-17
Incomes which are treated as Agricultural Income
• Income from sale of replanted trees, Income from Plantation
• Rent received for agricultural land
• Income from growing flowers & creeper (climbing plant)
• Share of profit of a partner from a firm engaged in agricultural
operations
• Interest on capital received by a partner from a firm engaged in
agricultural operations
• Income derived from a sale of seeds
• Certain income which is not treated as agricultural income
• Income from poultry farming, Income from bee hiving
• Income from sale of spontaneously grown trees
• Income from dairy farming, Purchase of standing crop
• Dividend paid by a company out of its agricultural income
• Income of salt produced by flooding the land with sea water
• Royalty income from mines, Income from butter and cheese making
• Receipt from TV serial shooting in farm house is not agricultural
income
2. Receipt by a Member 3. Share of Partner in
from HUF – u/s 10 (2) : Income of a Firm – u/s
• Any sum received by a 10 (2A) :
member of HUF out of • Partner’s share of
the income of the family income in a Firm is
or estate of the family is exempt from tax
exempt from tax.
• Because Firm is a
separate taxable entity
under the Act and
• The income earned by
the firm is taxed in its
own hands.
4. Interest to Non – 5. Foreign Allowance – u/s
Residents – u/s 10 (4) & 10(7)
(4B) :
• Any allowance paid or
• Interest earned by non
allowed outside India by
resident Indians on the
following is exempt from the Government to an
tax.. Indian citizen for
rendering service outside
• Securities or Bonds notified
India is wholly exempt
by central government
from tax.
• Non Resident (External)
Account in any bank in
India
• Notified Savings Certificates
(NSC VI & VII issue).
6. Compensation on
account of Disaster –
u/s 10(10BC) :
• Any amount received or
receivable from the
Central Govt., or a State
Govt., or a local
authority by an
individual or his legal
heir by way of
compensation on account
of any disaster is fully
exempt from taxation.
7. Receipts under Life Insurance Policies – u/s 10 (10D) :
8. Payments from Public 10. Scholarships – u/s 10
Provident Fund – U/s (16) :
10(11) : • Scholarships granted to
• Any payments from PPF meet the cost of education
set up & notified by the are exempt
central government is
exempt from tax
11. Allowances to MP/MLA u/s 10(17)
12. Govt. Awards & 13. Pension received by
Rewards – u/s 10 winners of gallantry
(17A) : awards – u/s 10(18)
• Any payment made • Pension received by an
whether in cash or in individual who has been in
kind as an award or as a the service of central / state
reward by the central or government and who has
state govt or any other been awarded Param Vir
body and approved by Chakra or Maha Vir
central govt is exempt Chakra or Vir Chakra or
from tax. such other gallantry
awards
14. Family Pension Received by Members of Armed Forces – u/s
10(19)
• Family pension received by the widow (or children or nominated
heirs) of a member of the armed forces including para-military
forces) of the Union is exempt from tax, provided
• The death of such member has occurred in the course of operational
duties or having circumstances such as follows and certified by the
Head of the Department where the deceased member of the
armed forces last served.
• Acts of violence or kidnapping or attacks by terrorists or anti social
elements
• Action against extremists or anti social elements
• Enemy action in international war, Border skirmishes (battle, clash etc)
• Action during deployment with a peace keeping mission abroad
• Laying or clearance of mines including enemy mines as also mine sweeping
operations
• In the aid of civil power in dealing with natural calamities and rescue
operations
• In the aid of civil power in quelling agitation or riots or revolts by
demonstrators
15. Annual value of one
palace – u/s 10(19A) : 16.Income of a Local
Authority – u/s 10 (20) :
• Annual value of any one
palace in the occupation of • Income of a local
a ruler would be exempt authority from House
from tax. Property, Capital gains,
other sources is exempt
from tax.
• Local authority means
Panchayat, Municipality,
Municipal Committee,
District Board,
Cantonment Board etc
17. Income of a News 18.Income of a Khadi &
Agency – u/s 10 (22B) : Village Industries Board –
u/s 10 (23BB) :
• Any income of a news
agency set up in India • Any income of a Khadi &
solely for collection and Village Industries Board or
distribution of news as an authority established in a
notified by the central State under any act for the
government is exempt from development of Khadi &
tax. Village Industries in the State
is exempt from tax.
19. Compensation to 20. Special Allowances – u/s 10 (14) :
Bhopal Gas Leak • Any allowances or benefits granted to
Victims – u/s 10 meet expenses wholly, necessarily and
exclusively incurred in the
(10BB) : performance of duties of an office to
• Any compensation the extent of actually spent are
paid to Bhopal Gas exempt from tax. E.g. Travelling,
Conveyance, Outstation, Daily,
Leak Victims is Helper, uniform
exempt from tax. • Child Education Allow. – Exempt @
Rs.100/- p.m. per child up to 2
Children
• Child Hostel Expenditure Allowance
– Exempt @ Rs.300/- p.m. per child
up to 2 children
• Transport Allow for travelling
between home & office – Exempt
Rs.800/- p.m. & Rs.1600/- p.m. in
case of an employee who is blind or
21. Income of a Minor • Non Taxability of
Child – u/s 10(32) Income in Certain Cases
• An income which arises - Income of minor child
to a minor child of an suffering from any
assesee is added or disability specified u/s
clubbed to the parent’s 80U
income. Income of a - Income of minor child on
minor child up to account of any manual
Rs.1500/-(per annum work
per child) is exempt from - Income of minor child on
tax. Parent means father account of any activity
or mother whose involving his skill, talent
income is higher. or specialized knowledge
& experience
22. Capital gain on 23. Dividend & Interest Income – u/s
transfer of US 64 – u/s 10(34)
10(33) • Any income by way of dividend
referred to in section 115-O
• Any income arising (dividend not covered by section
from the transfer of a 2(22)(e) from a domestic company
capital asset being a • Any income in respect of units of a
mutual fund
unit of US 64 is not
• Income from units received by a
chargeable to tax unit holder of UTI
where the transfer of • Income in respect of units from a
such assets takes place specified company
on or after April1, 2002. • However dividend received from a
• This rule is applicable co-operative society / banks is not
exempt from tax.
whether the capital • The person paying dividends on
asset (US 64) is long shares or interest on units will have
term or short term. to pay additional tax on dividend /
income distributed under sections
115O and 115R
24. Capital gain on compulsory
acquisition of urban
agricultural land – u/s 10(37)
• In case of individuals or HUF,
capital gain arising on
transfer by way of
compulsory acquisition of
urban agricultural land is not
chargeable to tax if such
compensation is received
after March 31, 2004 and the
agricultural land was used by
the assessee (or by any of his
parents) for agricultural
purposes during 2 years
immediately prior to transfer.
25. Long term capital gains on transfer of equity
shares / units – u/s 10(38)
• Long term capital gains arising on transfer of equity
shares or units of equity oriented mutual fund is not
chargeable to tax from the assessment year 05-06 if
such transaction is covered by securities transaction tax.
• Securities transaction tax is applicable if equity shares
or units of equity oriented mutual fund are transferred
on or after October 1 , 2004 in a recognised stock
exchange in India (or units are transferred to the mutual
fund)
• If the STT is applicable, LTCG is not chargeable to tax.
• Short term capital gain is taxable @15% (+SC+EC). If
income is shown as business income, the taxpayer can
claim deduction of securities transaction tax.
26. Reverse Mortgage – u/s 10(43) - In the reverse mortgage , borrower is
• - any amount received by an generally a senior citizen who is 65 years
individual as a loan (either in lump or more (or in the case of a married couple
sum or instalment) in a transaction of if either husband or wife is senior citizen).
reverse mortgage, is not chargeable to He owns a house property. However he
tax does not have regular source of income. He
can mortgage his property with National
• - In a regular mortgage, a person Housing Bank or with a scheduled bank or
mortgages his property with the lender a housing finance company registered with
in return of loan amount. The loan the National Housing Bank (i.e. lender).
amount may be used to finance The lender in return pays periodic
purchase or construction of the same instalments or lump sum to the borrower
property or for any other purpose. The during his life time. The borrower can
loan amount is charged at a specific continue to stay in the property during his
interest rate and it has a pre- lifetime. The lender will recover the loan
determined tenure. The person taking along with the accumulated interest by
the loan has to repay the loan in the
selling the house after the death of the
form of equated monthly instalments
borrower. However, before resorting to
(EMIs). EMIs generally comprise of
disposal of the property, an option will be
both principal and interest amounts.
given to the legal heirs to repay the loan
The property which is mortgaged is
amount, along with the interest, and to get
utilised as a security to cover the risk
the mortgaged property released. Any
of default on the borrower’s part to
make payment of EMIs excess amount will be remitted back to the
legal heirs of the borrower
27. House Rent Allowance – u/s 10 (13A) & Rule 2A:
The least of the following amount is exempt from tax
a. 50% of Salary if house is situated in Mumbai, Kolkata,
Delhi or Chennai OR 40% of the salary in any other case
b. Excess of rent paid over 10% of the salary (Salary=Basic
Salary + DA (if part of retirement benefits))
c. Actual HRA received during the year.

HRA exemption is not available if

- The assesee has not actually incurred any expenditure on
payment of rent.
- The occupied accommodation is owned by the assessee.
- Assessee pays rent which does not exceed 10% of salary
28. Retrenchment Compensation – u/s 10 (10B) :
• Any compensation received by a workman under the
Industrial Disputes Act, 1947 or under any other act at the
time of his dismissal from job or closing down of the
undertaking in which he is employed is exempt from tax as
follows -
- Amt calculated as per Industrial Disputes Act 1947 or
- Amount notified by the Government Rs.500000/- or
- Amount actually received, whichever is less.
32. Leave Travel Concession –
u/s 10 (5):
• The value of any travel
concession or assistance
received by an employee from
his employer or former
employer for himself and his
family, in connection with his
proceedings on leave to any
place in India , while in service
or after retirement or
termination of his service is
exempt from tax limited to
the actual expenses incurred
for the travel. Family means
spouse, children, parents,
brothers & sisters if they are
wholly or mainly dependent
on him
It was so simple & without any confusion….