Outstation allowance: Allowance granted to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.Īmount of exemption shall be lower of following: It is exempt from tax up to ₹ 1,060 per month ( for altitude of 9,000 to 15000 feet ) or ₹ 1,600 per month (for altitude above 15,000 feet) It is exempt from tax up to ₹ 4,200 per month. for more information refer rule 2BB, Income-tax Rules, 1962Īny special allowance in the nature of counter-insurgency allowance granted to the members of armed forces operating in areas away from their permanent locations( Any assessee claiming exemption in respect of the this allowance shall not be entitled to the exemption in respect of disturbed area allowance) Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)Īmount exempt from tax varies from 300 per month to 7,000 per month.(for more information refer rule 2BB, Income-tax Rules, 1962īorder area allowance Remote Locality or allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations)Īmount exempt from tax varies from 200 per month to 1,300 per month. Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations) If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)Ĭompensatory Modified Area Allowance. Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) OrissaĬompensatory Field Area Allowance. Up to 1,600 per month (3,200 per month for blind and handicapped employees) is exempt Transport Allowance is granted to an employee to meet expenditure on commuting between place of residence and place of duty Up to 300 per month per child up to a maximum of 2 children is exempt Up to 100 per month per child up to a maximum of 2 children is exempt Research Allowance granted for encouraging the academic research and other professional pursuitsĬATEGORY-2 Exempt lower of: Amount of Allowance Received OR Limit specified There are different categories of special allowances.ĬATEGORY-1 Exempt lower of: Amount of Allowance Received OR Amount SpentĬonveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an officeĮxempt to the extent of expenditure incurred for official purposesĪny Allowance to meet the cost of travel on tour or on transferĭaily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty There is a taxable allowance and an exempt allowance. Special allowance is a fixed amount that is given to employees over and above the basic salary in order to meet certain requirements.
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