As per new rule 3(9) (vi) “Salary” includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called from one or more employers, as the case may be, but does not include the following, namely:
(a) Dearness allowances or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned;
(b) Employer’s contribution to the provident fund account of the employee;
(c) Allowances which are exempted from payment of tax,
(d) Value of perquisites specified in sub-section (2) of Section 17 of the Income Tax Act.
(e) any payment or expenditure specifically excluded/under proviso to sub-clause(iii) of clause (2) or proviso to clause to (2) of Section 17.
As per the Finance (No. 2) Act, 2004, the contribution made by the central government in the previous year to the account of an employee under the pension scheme in terms of Section 80CCD would be added to the total salary income of the employee and tax deductible up to 10% of salary.