Salary--Perquisite--"Sumptuary allowance"--Exempt to the extent that

such allowance is required to be deducted in computing the income

chargeable under the head "Salaries" under section 16(ii)(a).

According to Board's instruction "Sumptuary Allowance" has to be

treated as an entertainment allowance. In view of this, the sumptuary

allowance received by a person, who is in receipt of salary from the

Government to the extent that such allowance is required to be

deducted in computing the income chargeable under the head "Salaries"

under section 16(ii)(a) of the I.T. Act, 1961, may be regarded as an

allowance exempted from payment of Income-tax. Allowance in the nature

of entertainment allowance, to the extent such allowance is deductible

under clause (ii) of section 16 is excluded from the term "salary"

under Explanation 2 to Rule 3 of the Income-tax Rules, 1962, and,

therefore, may not be included in the term `Salary' for the purposes

of the said rule.

[F. No. 35/32/66-IT(B), dated 24.9.1966].