Saurrav Sood, practice leader (international tax & transfer pricing) at SW India, said, “We often find exemptions, deductions and rebate used as words synonym to tax. While many people use it interchangeably, but each has its own connotation and meaning different from the other.”
SW’s Sood said house rent allowance, leave travel allowance and perquisites such as mobile phones and laptops will come under the category of exemptions while calculating salary income. “Similar exemption exists for other category of income also.”
Saurrav Sood said, “Where exemption means no tax to be levied on the income, deduction is reduction of taxpayer’s gross income on which tax shall be calculated.”
SW India’s Saurrav Sood said income tax rebate is more of a set-off from the tax payable.