Provisions of section 10(10CC) of the Income Tax Act exempts the income tax paid by the employer (on behalf of the employee) on the non-monetary perquisites provided to the employee. The current article simplifies the said exemption provisions of section 10(10CC) of the Income Tax Act.

Understanding the provisions of section 10(10CC)

The provisions of section 10(10CC) of the Income Tax Act simply states as under-

  • The employee should be deriving income in the nature of a perquisite [as defined under section 17(2) of the Income Tax Act].
  • Such income (i.e. perquisite) should be non-monetary.
  • The employer should have paid the income tax (on behalf of the employee) on such non-monetary perquisite.
  • Then, in such case, the income tax paid by the employer would be exempt under section 10(10CC).

Understanding the meaning of the term ‘perquisites’-

In simple term, perquisite means any casual benefits in addition to a salary or wages. Perquisites can be paid in both monetary (i.e. cash) and non-monetary (i.e. kind).

Under the Income Tax Act, the term perquisite is defined under section 17(2). The term perquisite includes the following items-

1. The value of rent-free accommodation provided to the employee by the employer.

2. The value of any concession in rent in respect of accommodation provided to the employee by the employer.

3. The value of any amenity or benefit granted either free of cost or at concessional rate in specified cases.

4. An amount paid by the employer, in respect of an obligation, which actually was payable by the employee.

5. The sum payable by the employer (either directly or through a fund) to effect an assurance on the life of the employee or to effect the contract for an annuity.

6. The amount of contribution by the employer to an approved superannuation fund in respect of the employee, to the extent it exceeds INR 1.50 Lakhs.

7. The value of any specified security / sweat equity shares (allotted or transferred), directly or indirectly, by the employer either free of cost or at the concessional rate to the employee.

8. The value of any other fringe benefit / amenity as may be prescribed.

It is very important to make a note here that exemption under section 10(10CC) of the Income Tax Act is available against any income tax paid by the employer on the ‘non-monetary perquisite’ (the exemption doesn’t include tax paid on monetary perquisite).

Table – Articles on Section 10 Exemptions

Sr. No. Particulars
1 Section 10(1)– Exemption to Agricultural Income
2 Section 10(2) Exemption to amount received by co-parcener from HUF
3 Section 10(2A) Exemption towards share of income from firm/LLP
4 Exemptions towards interest to non-residents | Section 10(4) & 10(4B)
5 Exemption on Tax paid by Govt or Indian concern on certain income of a foreign company
6 Section 10(7) Perquisites/allowances exemption to Govt employees serving outside India
7 Exemption- Section 10(8A) & section 10(8B) of Income Tax Act
8 Exemption towards commuted value of pension Section 10(10A)
9 Exemption towards retrenchment compensation received by workman Section 10(10B)
10 Section 10(10BC) Exemption towards compensation received on account of any disaster
11 Section 10(10C) Exemption of amount received on voluntary retirement
12 Exemption towards tax paid by employer on non-monetary perquisites: Section 10(10CC)
13 Section 10(10D) Exemption towards amount received under a Life Insurance Policy
14 Exemption for amount received from Statutory & Recognized PF
15 Exemption for payment from approved superannuation fund Section 10(13)
16 Income Tax Exemption on prescribed allowances/ benefits | Section 10(14)
17 Section 10(15) Exemption- Interest on Bonds, Debentures, Securities
18 Scholarship exemption | Section 10(16) | Income Tax Act 1961
19 Exemption towards income for administration of Charitable or Religious Institution
20 Section 10(32) Exemption | Income of minor clubbed with parent
21 Exemption for dividend income received from Indian Company | Section 10(34)
22 Section 10(34A) Exemption towards income received by a shareholder on buy back of shares
23 Section 10(35) Exemption towards income received from units
24 Section 10(37) Exemption towards Capital Gain arising on Compulsory Acquisition of Urban Agricultural Land

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