I got a salary of about Rs 51,000 per month in cash for three months. I deposited the amount in my salary savings account in which the regular salary of other months are credited by cheque. Is there any violation of income tax rules? Can this amount of Rs 1,53,000 be included in Form 16?

Rajat Patra, Howrah

It is not mandatory that the salary payment must be through cheques. But under section 40A(3), an expenditure of more than Rs 20,000 by cash per day is not allowed for the payer. So, nobody should pay salary in the form of cash. The amount can be included in Form 16.

Exemption on HRA

I used to work in Chennai last year. I changed the job in June 2011. In between, I had taken a break for three months. I didn’t get any salary for three months. While computing tax liability, how shall I take into account my HRA deduction? I had paid rent for those three months?

Sutapa Goswami, Salt Lake

Exemption on HRA will be available up to the minimum of the following: Actual house rent allowance received from your employer; Actual house rent paid by you minus 10 per cent of your basic salary; 50 per cent of your basic salary if you live in a metro or 40 per cent of your basic salary if you live in a non-metro city. Here salary means basic plus dearness allowance plus any commission based on a fixed percentage of the turnover of the employer. You cannot claim HRA deduction for those three months since you didn’t receive HRA in those months.

Transport fee

If I don’t have a vehicle in my name and I hire a taxi on monthly basis from residence to office, can I claim tax benefit on reimbursement of conveyance expenses under the income tax rule?

Sumit Singh, Calcutta

If you are a salaried employee, reimbursement is not allowed. However, a fixed monthly transportation/conveyance allowance of Rs 800 per month is allowed for deduction. You just need to break up your salary details and show Rs 800 as transportation allowance.

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