Clause 22 - Deductions from gross salary - Direct Taxes Code Bill, 2009

Deductions from gross salary 22. (1) The deductions for the purposes of section 20 shall be the following: - (a) any sum paid on account of a tax on employment within the meaning of clause (2) of Article 276 of the Constitution; (b) the amount received from his employer for journey by the person between his residence and office or any other place of work, to the extent prescribed; (c) any such special allowance or benefit specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit, as may be prescribed, to the extent to which such expenses are actually incurred for that purpose; (d) the amount due or received, directly or indirectly, from his employer, in connection with his voluntary retirement or termination of service or voluntary separation under any scheme framed for this purpose in accordance with such guidelines as may be prescribed; (e) the amount of any gratuity received from one or more of his employers, subject to limits as may be prescribed, if the amount is received - (i) on his retirement, or on his becoming incapacitated prior to such retirement, or on termination of his employment; or (ii) by the spouse, children or dependants on the death of the person. (f) the amount of any death-cum-retirement gratuity received under the Payment of Gratuity Act, 1972 or from the Central Government, State Government, local authority or any public sector company; (g) the amount received in commutation of pension under a scheme of his employer, framed in accordance with the prescribed rules, to the extent of - (i) one-third of the pension, in a case where he receives any gratuity; and (ii) one-half of such pension, in any other case; and (h) the amount of any pension received by an individual who has been in the service of the Central Government or State Government and has been awarded "Param Vir Chakra" or "Maha Vir Chakra" or "Vir Chakra" or such other gallantry award as the Central Government may, by notification in the Official Gazette, specify in this behalf. (2) The deduction under clauses (d) to (g) of sub-section (1) shall be allowed if the amounts referred to therein is paid to, or deposited in, a Retirement Benefits Account maintained with any permitted savings intermediary in accordance with the scheme framed and prescribed by the Central Government in this behalf.