Which of the following is/are included in salary as per Section 17 of the Income Tax Act, 1961?

A. Wages

B. Perquisite

C. Profits in lieu of salary

D. Compensation on termination of employment

Choose the correct answer from the options given below:

Correct option is D

Section 17 of the Income Tax Act, 1961 defines salary to include:
1. Wages (A):
· Regular remuneration paid to employees for services rendered.
2. Perquisites (B):
· Non-monetary benefits like rent-free accommodation, use of a company car, or concessional loans.
3. Profits in lieu of Salary (C):
· Payments received instead of salary, such as retrenchment compensation or gratuity.
4. Compensation on Termination (D):
· Payments like severance pay or golden handshakes are treated as part of salary income.
Information Booster: Tax deductions under Section 80C to 80U can be applied to reduce taxable salary income. Employers deduct TDS as per applicable rates.
Additional Knowledge: Certain components, like House Rent Allowance (HRA) or Leave Encashment, are partially exempt from taxation under specific conditions.