different allowances

a. 50% of salary in Delhi, Bombay, Calcutta, Madras or 40% of salary in other cases ; b. House rent allowance ; or c. The excess of rent paid over 10% of salary. Entertainment allowance – this allowance is first included in salary and thereafter a deduction is allowed. In the case of Government employees, least of the following is deductible – a. Rs. 5,000 ; b. 20% of salary ; or c. Entertainment allowance. Children education allowance – It is exempt from tax to the extent it does not exceed Rs. 100 per month per child for a maximum of two children (actual expenditure is not taken into consideration). Hostel expenditure allowance - It is exempt from tax to the extent it does not exceed Rs. 300 per month per child for a maximum of two children (actual expenditure is not taken into consideration). Exemption is in addition to the exemption available in the case of children education allowance. Transport allowance – it is given to an employee to meet his expenditure for the purpose of commuting between office & residence. It is exempt up to Rs. 800 per month (actual expenditure is not taken into consideration). The exemption is Rs. 1,600 per month in the case of an employee who is blind or orthopedically handicapped. In the case of serving Chairman & members of UPSC, transport allowance is exempt from tax without any monetary ceiling.

**DIFFERENT ALLOWANCES** City compensatory allowance – Fully taxable under sec. 15. House rent allowance – exempt from tax to the extent of the least of the following – a. 50% of salary in Delhi, Bombay, Calcutta, Madras or 40% of salary in other cases ; b. House rent allowance ; or c. The excess of rent paid over 10% of salary. Entertainment allowance – this allowance is first included in salary and thereafter a deduction is allowed. In the case of Government employees, least of the following is deductible – a. Rs. 5,000 ; b. 20% of salary ; or c. Entertainment allowance. Children education allowance – It is exempt from tax to the extent it does not exceed Rs. 100 per month per child for a maximum of two children (actual expenditure is not taken into consideration). Hostel expenditure allowance - It is exempt from tax to the extent it does not exceed Rs. 300 per month per child for a maximum of two children (actual expenditure is not taken into consideration). Exemption is in addition to the exemption available in the case of children education allowance. Transport allowance – it is given to an employee to meet his expenditure for the purpose of commuting between office & residence. It is exempt up to Rs. 800 per month (actual expenditure is not taken into consideration). The exemption is Rs. 1,600 per month in the case of an employee who is blind or orthopedically handicapped. In the case of serving Chairman & members of UPSC, transport allowance is exempt from tax without any monetary ceiling. Allowance for transport employees - It is given to employees of transport undertaking to meet their personal expenditure during duty performed in the course of running of such transport from one place to another place. The amount is exempt to the extent it does not exceed (a) 70% of the allowance or (b) Rs. 10,000 per month whichever is lower (actual expenditure is not taken into consideration). Tribal area allowance – Exempt up to Rs. 200 per month in some cases. Travelling allowance, conveyance allowance, helper allowance, research allowance, uniform allowance - These allowances are given to meet specific expenditure in performance of duties of an office. Exemption is available to the extent the amount is utilized for the specific purpose for which the allowance is given. Transfer allowance –It is exempt from tax to the extent expenditure is incurred in connection with transfer, packing and transportation of personal effects on transfer from one place to another place. Foreign allowance – Exempt from tax if paid outside India by the Government to an Indian citizen for rendering service outside India. Tiffin allowance – Taxable. Fixed medical allowance – Taxable. Allowance received by a teacher/researcher from a SAARC member State – Not taxable up to 2 years. Sumptuary allowance to serving Chairman/members of UPSC - Not chargeable to tax. Allowance to retired Chairman & retired members of UPSC – An allowance (subject to a maximum of Rs. 14,000 per month) for defraying the service of an orderly and for meeting expenses incurred towards secretarial assistance on contract basis, is not chargeable to tax. Thanks

Different type of allowance 1. House Rent Allowance u/s. 10 (13A). 2. Special Allowance u/s. 10 (14): Transport Allowance, Conveyance Allowance, Daily Allowance, Uniform Allowance, Helper Allowance, Research Allowance, Children Education Allowance, Children’s Hostel Expenditure Allowance. Thanks

> Different types of allowances 1. Dearness allowance 2. City compensatory allowance 3. House rent allowance [10(13A) and rule 2A] 4. Foreign allowance [10(7)] 5. Travelling allowance 6. Conveyance allowance 7. Specific allowance