Specifying Section 10 Exemptions
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See page overview
Select “Section 10 exemptions” hyperlink from the left pane.
The “Section 10 Exemptions” page appears. The system will display the following.
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Tax Setup Unit |
The name of the tax setup unit in which the tax set up has been deployed. Tell me more |
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Date Format |
The date format applicable to the login user. Tell me more |
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Tax Year |
From the drop-down list box select the tax year for which the section 10 exemptions are to be specified. The drop-down list box contains list of all the tax years that have been created in the “Create Tax Year” activity and have status as “Active”. |
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By default the system displays the current tax year. Current tax year indicates the year in which the system date falls in between the start and end date of the tax year. If such a tax year is not defined, the system will default “Select” value. |
At the launch of the page, the system retrieves the values if defined earlier. Otherwise the system displays with a blank value. If the details are entered, you can modify any or all the details.
As you specify a default tax year, you indicate that the new tax year will inherit all the exemptions applicable to the selected default tax year.
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Default From Tax Year |
From the drop-down list box select the tax year whose exemptions is applicable for the current tax year. The drop-down list box displays list of all the tax years created in the “Create Tax Year” activity having status “Active” and are prior to the current tax year. By default the system will display with a blank value. |
Note: As you specify the default tax year, the system displays all the details that have been specified for the selected tax year. You can modify the details if any, and save the details.
You can specify HRA exemptions applicable to an employee either specifying the details in the multiline. If the details are specified earlier, the system retrieves the data. You can modify the same. If you are entering the values for the first time, the system displays with a blank values in the multiline.
In the “HRA Setup” multiline, you can specify, the percentage of salary exempted from the employee’s income based on his/her resident city or specify the percentage in excess of salary that is applicable.
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City Classification |
From the drop-down list box select the city classification for which HRA details are to be specified. |
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% of Salary |
The percentage of salary for which the employee can avail HRA exemption. |
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Note that salary indicates a sum of employee’s “Basic” and “Dearness Allowance”. |
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% In Excess of Salary |
The maximum percentage of the HRA exemption that can be claimed. |
To specify education allowance exemptions
You can specify education allowance exemptions applicable to an employee either by specifying the amount. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with a blank values. Education allowance is the amount received by the employee to incur educational expenses of his/her children. A certain amount of it is exempted from tax. These values are specified in the “Education Allowance” group box.
In the “Education Allowance” group box specify the following details.
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Maximum Number of Children |
Enter the maximum number of children for whom the education allowance is exempted. Note that you must enter a whole number and not a fraction or a negative value. |
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Per Month Per Child (Rs) |
Enter the maximum amount that can be exempted for a child in a month. |
Note: If you specify value in the “Maximum Number of Children field”, you must also specify the value in the “Per Month Per Child” field. Otherwise the system displays an error.
You can specify hostel allowance exemption details that an employee is eligible, either by specifying the amount. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with a blank values. Hostel allowance is the amount received by the employee to incur hostel expenses of his/her children. A certain amount of the total value is exempted from tax. These details are specified in the “Hostel Allowance” group box.
In the “Hostel Allowance” group box, specify the following details.
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Maximum Number of Children |
Enter the maximum number of children for whom the hostel allowance is exempted. Note that you must enter a whole number and not a fraction or a negative value. |
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Per Month Per Child (Rs) |
Enter the maximum amount that can be exempted for each child in a month. |
Note: If a value is specified in the “Maximum Number of Children field”, you must also specify the maximum amount that can be availed for each child in the “Per Month Per Child” field. Otherwise the system will display with an error.
To specify leave encashment details
You can specify leave encashment value that an employee is eligible for exemption, either by specifying details in the multiline. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with a blank values.
In the “Leave Encashment” group box, specify the following details.
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Full Exemption |
From the drop-down list box select “Yes” to indicate that the total amount received by the employee is exempted from tax. Otherwise select “No”. By default the system displays with a blank value. |
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Maximum (Life Time) |
The maximum amount that an employee can avail exemption. This field is mandatory if you have selected “No” option above. |
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No. of months for average salary |
The total number of months, based on which the average salary is computed. |
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Eligible Days in a Year |
The number of days the employee can avail for each completed year of service. |
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Maximum No. of Days |
The maximum number of days in a month based on which the computations are made. |
You can specify gratuity details, in the “Gratuity Details” group box based on which the system will compute the exemption values for an employee. You can specify these details either in the “Full Exemption” drop-down list box. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with blank values. Gratuity is the amount given to the employee as an award for the services rendered to the organization.
In the “Gratuity” group box, specify the following details.
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Full Exemption |
From the drop-down list box select “Yes” to indicate that the total amount received by the employee is exempted from tax. Otherwise select “No”. By default the system will display with a blank value. |
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Maximum (Life Time) |
The maximum amount that an employee can avail exemption. This field is mandatory if you have selected “No” option above. |
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No. of months for average salary |
The total number of months, based on which the average salary is computed. |
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Eligible Days in a Year |
The number of days the employee can avail for each completed year of service. |
To specify superannuation details
You can specify superannuation details, in the “Superannuation” group box based on which the system will compute the exemption values for an employee. You can specify these details either in the “Full Exemption” drop-down list box. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with blank values. Superannuation is the amount given to the employee as a retirement benefit.
In the “Superannuation” group box, specify the following details.
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Full Exemption |
From the drop-down list box select “Yes” to indicate that the total amount received by the employee is exempted from tax. Otherwise select “No”. By default the system will display with a blank value. |
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Maximum (Life Time) |
The maximum amount that an employee can avail exemption. This field is mandatory if you have selected “No” option above. |
Apart from the above exemption items, you can also specify values for other items that are exempted from tax. For example, conveyance allowance, travel allowance, etc.
You can specify these details, in the “Other Exemptions” multiline based on which the system will compute the exemption values for an employee. You can specify these details either in the multiline. If the details are specified earlier, the system retrieves the same. You can also modify and save the details. If you are entering the values for the first time, the system displays with blank values.
To specify the other exemption items, specify the following in the multiline.
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Exemption Items |
From the drop-down list box select the exemption items for which the details must be defined. The drop-down list box displays a list of all the exemption items defined in the “Quick Codes” component of the HRMS General Masters. By default the system displays with a blank value. |
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Amount |
The maximum amount that can be availed as exemption. |
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Per |
From the drop-down list box select the period for which the specified amount can be availed. By default the system defaults with a blank value The drop-down list box lists “Year” and “Month” values. You must select one. |
Select the Book icon beside the comments field. The system will display a dialog box containing comments, if entered earlier.
You can view, modify or delete the content.
Select the “OK” pushbutton to save the details and return to the previous page.
Select the “Cancel” pushbutton to return to the previous page without saving the details entered.
Select the “Save” pushbutton to save the details specified. As the details are saved, the system will refresh the page with the saved details.
Hyperlinked topics below
Use this page to create or modify the various exemptions applicable to the employees under section 10 of the Income tax act.
In this page, you can specify section 10 exemptions applicable for a tax year in three different ways.
Specify new values for each type of exemption.
Specify an earlier tax year make it applicable to the new tax year if the values are equal.
Apart from specifying the details, you can also modify the same.
To specify education allowance
To_specify_leave_encashment_details
To_specify_superannuation_details