Section 279: Limits for the purposes of Schedule III [Table: Sl. No. 11] to the Act
Limits for the purposes of Schedule III [Table: Sl. No. 11] to the Act.
279. (1) The amount, which is not to be included in the total income of an assessee in respect of the special allowance referred to in Schedule III [Table: Sl. No. 11] to the Act, shall be the least of the following:
(a) the actual amount of such allowance received by the assessee in respect of the relevant period; or
(b) the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee for the relevant period; or
(c) in case of an assessee employed in the location mentioned in column B of the following Table, an amount equal to such percentage of salary, mentioned in column C thereof, due to the assessee in respect of the relevant period:—
TABLE
Sl. No. Percentage of salary
A C
1. 50%
2. 40%
(2) In this rule,—
(a) “relevant period” means the period during which the said accommodation was occupied by the assessee during the tax year; and
(b) “salary” includes dearness allowance, if provided for under the terms of employment, but excludes all other allowances and perquisites.
Source: official text of Income-tax Rules, 2026 as published on India Code (PDF). All sections of Income-tax Rules, 2026.