Section 10 of the Income Tax Act defines income/allowances that are not part of the main income of an individual. These incomes are exempted from taxation as per the provisions laid down in Section 10.
To ensure that the exemption is provided under Section 10, you need to map the relevant pay components to the Income Tax deduction components.
On the Home Page click “Compliance”.
Click “Income Tax”.
Click “MapTax Exemption Components” under “Configuration, Settings”.
Map the components to the relevant “Pay Component” from the drop down.
“Validate Declaration”: Check the box to validate the declared amount, against the standard amount defined.
For Example: If an employee has declared more than the exempted amount, the exemption will be limited only to the extent of the amount allowed as exemption.
Check the box “Show to Employee” so that it is displayed in Employee Self Service, and the employees can declare the same in ESS.
“New Regime Exemption” -Enabling this option will provide you exemption for specified components.