Section 10 of the Income Tax Act outlines specific types of income exempt from taxation, such as allowances and benefits. These are not considered part of an individual's main income.
To ensure the exemption is provided under Section 10, you should map the relevant pay components to the Income Tax deduction components.
On the Home Page click “Compliance”.
Click “Income Tax”.
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 an exemption.
Check the box “Show to Employee” to display in Employee Self-Service, and the employees can declare the same in ESS.
“New Regime Exemption” -Enabling this option will provide you an exemption for specified components.
Click “Save”.
The video outlining the process is attached for your reference