Profit in lieu of salary is any amount which is received by the employee either outside the organization or within the organization which may be received by an assessee from his employer or former employer in connection with termination of his employment or modification in terms of employment, or any amount received under keyman insurance policy or any lumpsum received before joining or after cessation of his employment.
- Any payment from Unrecognized Provident Fund( URPF) or such other fund to the extent to which it does not consist of contribution by the assessee or interest on such contribution.
- Any sum received under a keyman insurance policy including the sum allocated by way of bonus on such policy.
- Any other amount from employer except the following:
- Gratuity exempted u/s 10(10)
- House rent allowance
- Retrenchment compensation
- Superannuation fund
- Statutory provident fund or public provident fund
- Recognized provident fund, if does not include contribution of assessee and interest thereon
- Keyman insurance policy and bonus
- Any amount received prior to employment or after the cession of employment
Reference:
As Per Section 17(3), Of the Income Tax Act, 1961-
17. For the purposes of sections 15 and 16 and of this section,—
(3) “profits in lieu of salary”includes—
(i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto;
(ii) any payment (other than any payment referred to in clause (10) [, clause (10A)] [, clause (10B)], clause (11), [clause (12) [, clause (13)] or clause (13A)] of section 10), due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or [interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
Explanation.—
For the purposes of this sub-clause, the expression “Keyman insurance policy” shall have the meaning assigned to it in clause (10D) of section 10;]
(iii) any amount due to or received, whether in lump sum or otherwise, by any assessee from any person—
(A) before his joining any employment with that person; or
(B) after cessation of his employment with that person.