Prescribed Allowances or Benefits [Section 10(14)]

As per section 10(14), read with rule 2BB following allowances granted to an employee are exempt from tax subject to certain limit:

 

Allowances

Exemption Limit

Children Education Allowance

Up to Rs. 100 per month per child up to a maximum of 2 children is exempt

Hostel Expenditure Allowance

Up to Rs. 300 per month per child up to a maximum of 2 children is exempt

Transport Allowance granted to an employee to meet expenditure on commuting between place of residence and place of duty

Up to Rs. 1,600 per month (Rs. 3,200 per month for blind and handicapped employees) is exempt

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

Amount of exemption shall be lower of following:

a)  70% of such allowance; or

b)  Rs. 10,000 per month

Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office

Exempt to the extent of expenditure incurred for official purposes

Travelling Allowance to meet the cost of travel on tour or on transfer

Exempt to the extent of expenditure incurred for official purposes

Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

Exempt to the extent of expenditure incurred for official purposes

Helper/Assistant Allowance

Exempt to the extent of expenditure incurred for official purposes

Research Allowance granted for encouraging the academic research and other professional pursuits

Exempt to the extent of expenditure incurred for official purposes

Uniform Allowance

Exempt to the extent of expenditure incurred for official purposes

Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 300 to Rs. 7,000 per month.

Border area, Remote Locality or Disturbed Area or Difficult Area Allowance (Subject to certain conditions and locations)

Amount exempt from tax varies from Rs. 200 to Rs. 1,300 per month.

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) Orissa

Up to Rs. 200 per month

Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance(Subject to certain conditions and locations)

Up to Rs. 2,600 per month

Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance(Subject to certain conditions and locations)

Up to Rs. 1,000 per month

Counter Insurgency Allowance granted to members of Armed Forces operating in areas away from their permanent locations. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)

Up to Rs. 3,900 per month

Underground Allowance to employees working in uncongenial, unnatural climate in underground mines

Up to Rs. 800 per month

High Altitude Allowance granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)

a)  Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)

b)  Up to Rs. 1,600 per month (for altitude above 15,000 feet)

Highly active field area allowance granted to members of armed forces (Subject to certain conditions and locations)

Up to Rs. 4,200 per month

Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)

Up to Rs. 3,250 per month

 

 

 

 

More Topics... @ Exempted Incomes
Exempted Incomes : Sec.10(1) to Sec.(4)(ii)
Exempted Incomes : Section-10(7)-Section-10(9)
Exempted Incomes : Section-10(10)-Sec-10(A)-Sec-10(AA)-Sec-10(B)
Exempted Incomes : Section-10(10BB)-Sec-10(10BC)-Sec-10(C)
Exempted Incomes : Section-10(10CC),Sec-10(10D),Sec-10(11),Sec-10(12),Sec-10(13)
Exempted Incomes : Section-10(15A),Sec-10(16),Sec-10(17),Sec-10(17A)
Exempted Incomes : Section-10(18),Sec-10(19),Sec-10(19A),Sec-10(20)
Exempted Incomes : Section-10(21),Sec-10(22B),Sec-10(23A),Sec-10(23AA)
Exempted Incomes : Section-10(23AAA),Sec-10(23MB),Sec-10(23A),Sec-10(23AA)
Exempted Incomes : Section-10(23BBA),Sec-10(23BBB),Sec-10(23BBC),Sec-10(23BBE),Sec-10(23BBH)
Exempted Incomes : Section-10(23C),Sec-10(23D),Sec-10(23DA),Sec-10(23EA),Sec-10(23EB),Sec-10(ED)
Exempted Incomes : Section-10(23FB),Sec-10(24),Sec-10(25),Sec-10(25A),Sec-10(26A)
Exempted Incomes : Sec.10(4B) to Sec.10(6)
Exempted Incomes : Section-10(26AAN),Sec-10(26AAB),Sec-10(26B),Sec-10(26BB),Sec-10(26BBB)
Exempted Incomes : Section-10(27),Sec-10(29A),Sec-10(30),Sec-10(31),Sec-10(32)
Exempted Incomes : Section-10(33),Sec-10(34),Sec-10(34A),Sec-10(35),Sec-10(35A),Sec-10(36)
Exempted Incomes : Section-10(37),Sec-10(38),Sec-10(39),Sec-10(40),Sec-10(41)
Exempted Incomes : Section-10(42),Sec-10(43),Sec-10(44),Sec-10(45),Sec-10(46),Sec-10(47),Sec-10(48),Sec-10(49)
Exempted Incomes : Section 10(6A), (6B), (6BB) and (6C)
List of Exempted Incomes (Tax-Free) Under Section-10
 
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