Allowance under Proprietor

This query is : Resolved

Mohd Sarfaraz Latibani (Querist)
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16 December 2008 What are the allowance I can pay to my employees under proprietor ship business and that allowance should be exempted from tax.

Thanks.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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16 December 2008 There is no different rule of prop. business for paying salaries. However You can include the following allowances:

HRA - needs calculation
Transport Allowance - exempted 800 p.m.
Uniform Allowance - actual expenditure by employee
Reimbursement of medical bills - exempted upto 15000 per year
LTC - Exempted 2 times in a block of 4 years. Exemption - actual expenditure.

CA Parvin Ahuja

CA Parvin Ahuja (Expert)
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16 December 2008 As far as exemptions of allowances to employees are concerned constitution of the employer is of no significance.