Entertainment allowances exempted

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2 Points Posted on 28 May 2021
is entertainment allowances exempted?
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On 28 May 2021 at 08:20 Report
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Quick Summary
Entertainment allowances are generally taxable. However, government employees can claim a deduction of up to £5,000, calculated as the least of specific limits. For those in the private sector, the full entertainment allowance received is considered taxable income with no such deduction available.

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Learner
2398 Points Posted on 28 May 2021

In the case of a Government employee (i.e., Central Government or a State Government employee), the least of the following is deductible:

1. 5,000

2. 20 percent of basic salary ; or

3. Amount of entertainment allowance granted during the previous year.

 

Entertainment allowance is fully taxable for employees working in the private sector.

1 Reply
On 28 May 2021 at 08:47
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Chartered Accountant
24588 Points Posted on 28 May 2021
Agree with above
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On 28 May 2021 at 09:12
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tax consultant
3306 Points Posted on 28 May 2021
Per se entertainment allowance is not exempt income.
it is taxable income.

after its added as salary, government employees get a deduction upto 5000.
other employees dont get any deduction.
this aspect is well explained by ramaraju.
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On 28 May 2021 at 09:56

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