Glossary
§17(1)(h) cap
The Income-tax Act 2025 provision taxing combined employer PF, superannuation and NPS contributions as a perquisite once they exceed ₹7.5 lakh a year — successor to old §17(2)(vii)/(viia).
When an employer’s combined PF, superannuation and NPS contributions exceed ₹7.5 lakh in a tax year, the excess is taxed as a perquisite in the employee’s hands. This includes any interest, dividend or accretion on the excess.
This is a direct renumbering of the old Income-tax Act 1961’s §17(2)(vii)/(viia) provisions into the 2025 Act’s §17(1)(h)/(i), with the cap amount unchanged.
Why it matters now: senior assignees with generous employer retirement contributions on top of a high CTC are the ones most likely to trip this cap. Model it explicitly — don’t assume the old numbers still hold under the new section.