MEANING OF SALARY U/S 17
1.Wages. Fully Taxable.
2.Annuity or Pension. Fully Taxable
3.Gratuity. It has been treated separately.
4. (a) Any Fees -- Fully Taxable
(b) Commission -- Fully Taxable
(c) Bonus -- Fully Taxable
(d) Perquisites -- (Perks) These are treated separately u/s 17(2)
(e) Profit in lieu of Salary -- These are treated separately u/s17(3)
5.Salary in lieu of Leave / Leave Encashment. Fully Taxable.
6.Advance Salary. Fully Taxable
7.Arrears of Salary. Fully Taxable.
8.Refund of Provident Fund (PF)
(a) If SPF -- Fully exempted
(b) If RPF -- Fully exempted if service is more than 5 years.
(c) If URPF -- Taxable portion is added in salary income. Taxable portion is equal to employer’s contribution + interest on this part. Interest on own contribution to URPF is taxable under the head “ Income from Other Sources.”