Summary: The sumptuary allowance granted to judges under the Supreme Court and High Court Judges Acts is exempt from income tax, meaning it is not treated as income under the Income Tax Act, 1961. However, for other judicial officers, the allowance is classified as an entertainment allowance, subject to a deduction limit of Rs. 5,000 per annum, as per CBDT Letter F. No. 35/32/66-IT(B), dated 24.09.1966. This instruction clarifies that the sumptuary allowance is considered an entertainment allowance and is not included in the term “salary” for determining perquisite values of residential accommodations. Additionally, Sections 23D and 22D of the Supreme Court Judges (Salaries and Conditions of Service) Act, 1958, and the High Court Judges (Salaries and Conditions of Service) Act, 1954, provide exemptions for certain allowances and benefits, including sumptuary allowances, from being included in the taxable income of judges. This ensures that judicial officers’ sumptuary allowances are not subject to income tax.
The sumptuary allowance for judges as defined under the Supreme Court and High Court Judges Acts is exempt from being treated as income under the Income Tax Act, 1961. However, for other judicial officers, this allowance is classified as entertainment allowance, subject to a deduction limit of Rs. 5,000 per annum. [See CBDT Letter F. No. 35/32/66-IT(B), Dated 24.09.1966]
CBDT Letter F. No. 35/32/66-IT(B), Dated 24.09.1966
Subject : Section 17 of the income-tax act, 1961 – Salary, Perquisite and Profits in lieu of salary – Sumptuary Allowance being in the nature of entertainment allowance not to be included in term “salary” for the purposes of determining perquisite value of residential accommodation under rule 3(a) of Income-Tax Rules
According to the Board’s instruction “sumptuary allowance” has to be treated as an entertainment allowance. In view of this, the sumptuary allowance received by a person, who is in receipt of salary from the Government, to the extent that such allowance is required to be deducted in computing the income chargeable under the head “Salaries” under section 16(ii)(a), may be regarded as an allowance exempted from payment of income-tax. Allowance in the nature of entertainment allowance, to the extent such allowance is deductible under clause (ii) of section 16 is excluded from the term “salary” under Explanation (2)(iv) [as it stood before the amendment made by the Income-tax (Amendment) Rules, 1974, to rule 3(a) of the Income-tax Rules, and, therefore, sumptuary allowance may not be included in the term “salary” for the purposes of said rule.
Text of Section 23D of The Supreme Court Judges (Salaries And Conditions of Service) Act, 1958
23D. Exemption from liability to pay Income-tax on certain perquisites received by a Judge. –
Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), –
(a) the value of rent-free official residence provided to a Judge under sub-section (1) of section 23 or the allowance paid to him under sub-section (1A) of that section;
(b) the value of the conveyance facilities provided to a Judge under section 23A;
(c) the sumptuary allowance provided to a Judge under section 23B, shall not be included in the computation of his income chargeable under the head “Salaries” under section 15 of the Income-tax Act, 1961 (43 of 1961).
(d) the value of leave travel concession provided to a Judge and members of his family.
Text of Section 22D in The High Court Judges (Salaries And Conditions Of Service) Act, 1954
22D. Exemption from liability to pay income-tax on certain perquisites received by a Judge. –
Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), –
- the value of rent-free official residence provided to a Judge under sub-section (1) of section 22A or the allowance paid to him under sub-section (2) of that section;
(b) the value of the conveyance facilities provided to a Judge under section 22B;
(c) the sumptuary allowance provided to a Judge under section 22C; (d) the value of leave travel concession provided to a judge and members of his family, shall not be included in the computation of his income chargeable under the head “Salaries” under section 15 of the Income- tax Act 1961 (43 of 1961).
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