Performance Bonus not forms part of salary for HRA calculation

Sudip Rungta Vs DCIT (ITAT Kolkata) Clause (h) of Rule 2A specifically provides that ‘salary’ includes dearness allowance, if the terms of employment so provede, but excludes all other allowances and perquisites. Accordingly, the performance bonus received by the appellant did not form part of ‘salary’ for the purposes of computing exemption u/s 10(13A) of the Act. We note that the decision of the Hon’ble Kerala High Court in the case of CIT Vs B. Ghosal (125 ITR 444) is on identical facts wherein on exact same set of facts the Court had held that ‘performance bonus’ does not for...