Allowances

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Devendra Kumar Dewangan (Querist)
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17 January 2014 Dearness allowance,
House Rent Allowance,
Deputation Allowance,
Tribal Allowance,
Medical Allowance,
Sumptuary Allowance,
Library Allowance,
Magazine Allowance,
Newspaper Allowance,
Water Allowance,
Electricity Allowance,

Kya ye shabhi Allowance Income Tax ki chhut ki dayre me ate hai, our yadi ate hai to inki sima kitni tak hai.

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Guest (Expert)

18 January 2014 ALL ALLOWANCES ARE FULLY TAXABLE EXCEPT HRA AND TRIBAL ALLOWANCE.REFER BELOW TO KNOW ABOUT THE LIMITS AND CONDITIONS FOR CLAIMING EXEMPTION.

An employee can claim exemption on his HRA under the Income Tax Act if he stays in a rented house and is in receipt of HRA from his employer. In order to claim the deduction, an employee must actually pay rent for the house which he occupies.

The rented premises must not be owned by him. In case one stays in an own house, nothing is deductible and the entire amount of HRA received is subject to tax. As long as the rented house is not owned by the assessee, the exemption of HRA will be available up to the the minimum of the following three options:

Actual house rent allowance received from your employer
Actual house rent paid by you minus 10% of your basic salary
50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

This minimum of above is allowed as income tax exemption on house rent allowance.

Salary here means basic salary which includes dearness allowance if the terms of employment provide for it, and commission based on a fixed percentage of turnover achieved by the employee. The deduction will be available only for the period during which the rented house is occupied by the employee and not for any period after that.

*Special Compensatory (Tribal Areas/Schedule Areas/Agency Areas) Allowance in States mentioned in Col. 3 of Sl. No. 3 of Table in rule 2BB(2)

Rs. 200* per month

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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18 January 2014 Any payment made in the name of allowances are taxable subject the their limits say
DA is fully taxable.
HRA partly taxable u/s 10(13A),
Deputation allowance if in India fully taxable but if it is outside India then the rules are applicable.
Tribal Allowance has also limit.
Medical allowance fully taxable in this manner all have a limit and taxability.

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