https://www.taxtmi.com/caselaws?id=270966 For exemption of gratuity and leave encashment under Sections 10(10) and 10(10AA) of the Income-tax Act, "salary" is governed by the Explanation to Section 10(10), which adopts Rule 2(h) of Part A of the Fourth Schedule. Under that rule, only dearness allowance is included, and only where the terms of employment so provide; other allowances and perquisites are excluded. The broader definition of salary in Section 17 does not apply to these exemption provisions. On that construction, exempt amounts are computed on basic pay plus dearness allowance alone, and the issue is decided against the assessee and in favour of the Revenue. en-us Wed, 02 Dec 2015 00:00:00 +0530 Mon, 02 May 2016 15:46:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=270966 For exemption of gratuity and leave encashment under Sections 10(10) and 10(10AA) of the Income-tax Act, "salary" is governed by the Explanation to Section 10(10), which adopts Rule 2(h) of Part A of the Fourth Schedule. Under that rule, only dearness allowance is included, and only where the terms of employment so provide; other allowances and perquisites are excluded. The broader definition of salary in Section 17 does not apply to these exemption provisions. On that construction, exempt amounts are computed on basic pay plus dearness allowance alone, and the issue is decided against the assessee and in favour of the Revenue. Case-Laws Income Tax Wed, 02 Dec 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=270966