Key Highlights of the Amendment
Two new rules have been added after Rule 3B in the Income-tax Rules, 1962:
Rule 3C – Salary Income Threshold
For the purposes of Section 17(2)(iii)(c) of the Income-tax Act, 1961: The prescribed income under the head “Salaries” is fixed at ₹4,00,000.
Rule 3D – Gross Total Income Threshold
For the purposes of Proviso to Section 17(2)(vi) of the Act: The prescribed Gross Total Income is fixed at ₹8,00,000.
These amendments provide statutory thresholds for determining tax treatment of perquisites and allowances under Section 17 of the Income-tax Act, 1961.
They are relevant for employers and employees while calculating taxable salary components and benefits.
In essence: The 2025 amendment introduces salary income threshold of ₹4 lakh and gross total income threshold of ₹8 lakh under Section 17(2) of the Income-tax Act for taxation of specified perquisites.