Q. What is the maximum amount not chargeable to tax for leave salary whether on Superannuation or otherwise as specified by the Government ?

A. The maximum amount not chargeable to tax beginning from July 1, 1995 is Rs. 1,35,360/- as specified by the Government.

Q. What is the maximum limit of compensation received at the time of voluntary retirement, that is not taxable?

A. U/s 10(10C) of the Income Tax Act, a sum upto Rs. 5,00,000/- received at the time of voluntary retirement is not taxable provided the voluntary retirement scheme is approved or framed as per the Rules. For details please see the module on Income from Salaries.

Q. Whether any TDS has to be deducted on the amount received under an approved voluntary retirement scheme?

A. If all the specified conditions are satisfied the employer need not deduct TDS on the amounts paid under the Voluntary Retirement Scheme. However, tax at source shall have to be deducted on amounts exceeding the prescribed monetary limit of Rs. 5 Lakhs paid under the Scheme.

Q. Whether pension is salary?

A. Yes, pension is treated as salary under the Income Tax Act and is taxable under the head Income from Salary. For details see the module pension under the head Income from Salaries .