Section 10 - Amendment of section 40 - Finance Act, 1964

10. Amendment of section 40 In section 40 of the Income-tax Act, in clause (c),- (1) for sub-clause (iii), the following sub-clause shall be substituted, namely:- (iii) any expenditure incurred after the 29th day of February, 1964 which results directly or indirectly in the provision of any benefit or amenity or perquisite, whether convertible into money or not, to an employee (including any sum paid by the company in respect of any obligation which but for such payment would have been payable by such employee), to the extent such expenditure exceeds one-fifth of the amount of salary payable to the employee for any period of his employment after the aforesaid date: Provided that in computing the aforesaid expenditure any payment by way of gratuity or the value of any travel concession or assistance referred to in clause (5) of section 10 or passage moneys or the value of any free or concessional passage referred to in sub-clause (i) of clause (6) of that section or any sum referred to in clause (vii) of sub-section (1) of section 17 or in clause (v) of sub-section (2) of that section or the amount of any compensation referred to in clause (i) or any payment referred to in clause (ii) of sub-section (3) of that section or any payment referred to in clause (iv) or clause (v) of sub-section (1) of section 36 shall not be taken into account. ; (2) the existing Explanation shall be re-numbered as Explanation 1 and after Explanation 1 as so re-numbered, the following Explanation shall be inserted, namely:- 'Explanation 2.- In sub-clause (iii), the word salary shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule.'.