Fourth Schedule, Part A, rule 2(h)

Fourth Schedule, Part A, rule 2(h) — the law in short

What the courts have decided on section Fourth Schedule, Part A, rule 2(h), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Sudip Rungta v DCIT ITATHelps taxpayerValidity unconfirmed
  The AO added my performance bonus to salary and cut my HRA exemption. Can he do that?
  No. 'Salary' for the house rent allowance exemption is not the general definition in s.17 but the one in clause (h) of rule 2 of Part A of the Fourth Schedule, which rule 2A picks up: it takes in basic salary and dearness allowance where the terms of employment so provide, and excludes all other allowances. A performance bonus therefore stays out, the ten per cent test ran on the basic salary of Rs 30 lakhs, and the assessee was held entitled to about Rs 5.20 lakhs of exemption.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.