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Exemption of allowance

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Rajat jain

student

239 Points Posted on 14 August 2025

Can we claim Internet allowances and fuel allowance as a deduction under the new regime of income tax as a deduction for allowances and in which head we claim allowance deduction in ITR please guide.

Replies (2)

Quick Summary

This discussion clarifies whether internet and fuel allowances can be claimed as deductions under India's new income tax regime. Generally, under the new regime, most allowances are taxable, and deductions are limited unless specifically permitted by the Income Tax Act. While allowances are reported under 'Income from Salary' in the ITR, specific conditions must be met for any available deductions.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 14 August 2025

In India, under the new tax regime effective from Assessment year 2021-22, allowances like Internet allowances and fuel allowances can be claimed as deductions if they are part of your salary and meet specific conditions under the INcome Tax Act.

For claiming deductions for allowances in the Income Tax Return(ITR):

Allowances like Internet and fuel are typically considered part of taxable income if received by an employee.

The new regime has limited deductions compared to the old regime. Most allowances are taxable, and deductions for allowances are generally not availale under the new regime unless specified under specific sections of the Income Tax Act.

In the ITR form, allowances are usually reported under " Income from Salary". Specific deductions, if allowable, would be claimed based on the sections applicable.