U.C Date : 25 Feb 2015
Fully Taxable Allowances:
Dearness Allowances, City Compensatory allowance, Medical Allowance, Tiffin allowance, Servant allowance, Project allowance, Overtime allowance, Warden Allowance, Family Allowance, Domestic Servant Allowance
Partly Taxable Allowances:
- Allowances which is received by employee for meeting expenses related to the employer’s business is not taxable in hands of employee to the extent it is actually incurred by employee. This includes allowances such as Travelling Allowance, Conveyance Allowance, Helper Allowance, Uniform Allowance etc.
Exempt for certain limits
For the following allowances, the deduction is limited to the amount mentioned
Transport allowance to employees of transport system (i) 70% of such allowance
(ii)Rs. 10,000 p.m
Whichever is lower
Tribal Area Allowances( in states of MP, Tamil Nadu, UP, Karnataka, Tripura, Assam, West Bengal, Bihar, Orissa Rs. 200 p.m
Transport Allowance Rs. 1600 p.m (Rs. 3200 p.m in case of blind or orthopaedically handicapped employees) Rs. 800 and Rs. 1600 respectively upto financial year 2014-15 Notification
Underground allowance Rs. 800 p.m
Children Education allowance Rs. 100 p.m per child for maximum 2 child
Hostel Expenditure allowance Rs. 300 p.m per child for maximum 2 child
Wholly exempt allowances
- Allowances to Indian citizen who is a government employee and rendering services outside India
- Allowances to High Court judges.
- Sumptuary Allowance to judges of High Court and Supreme Court.
- Allowances to employee of UNO