Notification/Circular No. – G.S.R. 555(E) August 18, 2025
Applicable Act/Rule – Income-tax Act, 1961 & Income Tax Rules 1962
Applicable Section/Rule – Rule 3C & Rule 3D
Section 17 of the Income-tax Act defines what is included in salary for taxation, particularly perquisites and allowances. However, the Act provides certain monetary thresholds which needed clarification through rules. To remove ambiguity and bring uniformity in tax treatment, the government has now prescribed fixed limits for salary income and gross total income under specific clauses of section 17.
Key amendments –
3C. Salary income for the purposes of item (c) of sub-clause (iii) of clause (2) of section 17 of the Act.
For the purposes of item (c) of sub-clause (iii) of clause (2) of section 17 of the Act, the prescribed income under the head “Salaries” shall be four lakh rupees.
3D. Gross total income for the purposes of clause (vi) of Proviso to clause (2) of section 17 of the Act.
For the purposes of clause (vi) of Proviso to clause (2) of section 17 of the Act, the prescribed gross total income shall be eight lakh rupees.
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