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Benefits Available to Salaried Persons under Income Tax Act

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A. Allowances

S.No.ParticularsBenefits
1House Rent Allowance
U/S 10(13A)
Use Calculator to Calculate HRA Chargeable for Income Tax
Least of the following is exempt:
a) Actual HRA Received
b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)
c) Rent paid minus 10% of salary
* Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission
Note:
i.Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent
ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].
2Children Education Allowance
U/S 10(14)
Up to Rs. 100 per month per child up to a maximum of 2 children is exempt
3Hostel Expenditure Allowance
U/S 10(14)
Up to Rs. 300 per month per child up to a maximum of 2 children is exempt
4Transport Allowance granted to an employee to meet expenditure on commuting between place of residence and place of duty
U/S 10(14)
Up to Rs. 1,600 per month (Rs. 3,200 per month for blind and handicapped employees) is exempt
5Transport Allowance to an employee working in any transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance.
U/S Sec. 10(14)
Amount of exemption shall be lower of following:
a) 70% of such allowance; or
b) Rs. 10,000 per month.
6Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office
U/S 10(14)
Exempt to the extent of expenditure incurred
7Any Allowance granted to meet the cost of travel on tour or on transfer
U/S 10(14)
Exempt to the extent of expenditure incurred
8Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty
U/S 10(14)
Exempt to the extent of expenditure incurred
9Helper/Assistant Allowance
U/S 10(14)
Exempt to the extent of expenditure incurred
10Research Allowance granted for encouraging the academic research and other professional pursuits
U/S 10(14)
Exempt to the extent of expenditure incurred
11Uniform Allowance
U/S 10(14)
Exempt to the extent of expenditure incurred
12Foreign allowances or perquisites paid or allowed by Government to its employees (an Indian citizen) posted outside India
U/S 10(7)
Fully Exempt
13Allowances to Judges of High Court/Supreme Court (Subject to certain conditions)
U/S -
Fully Exempt.
14Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:
U/S 10(45)
Fully Exempt
a) Value of rent free official residence
b) Value of conveyance facilities including transport allowance
c) Sumptuary allowance
d) Leave travel concession
15Allowances paid by the UNO to its employees
U/S -
Fully Exempt
16Allowances to Retired Chairman/Members of UPSC (Subject to certain conditions)
U/S 10(45)
Exempt subject to maximum of Rs.14,000 per month for defraying services of an orderly and for secretarial assistant on contract basis.
The value of residential telephone free of cost and the number of free calls to the extent of 1500 per month shall be exempt.
17Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)
U/S Sec. 10(14)
Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month.
18Border area allowances, Remote Locality allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations)
U/S Sec. 10(14)
Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month.
19Tribal area allowance given in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Orissa
U/S Sec. 10(14)
Rs. 200 per month
20Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
U/S Sec. 10(14)
Rs. 2,600 per month
21Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
U/S Sec. 10(14)
Rs. 1,000 per month
22Counter Insurgency Allowance granted to members of Armed Forces operating in areas away from their permanent locations. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and locations)
U/S Sec. 10(14)
Rs. 3,900 per month
23Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines
U/S Sec. 10(14)
Up to Rs. 800 per month
24High Altitude Allowance is granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)
U/S Sec. 10(14)
a) Up to Rs. 1,060 per month (for altitude of 9,000 to 15,000 feet)
b) Up to Rs. 1,600 per month (for altitude above 15,000 feet)
25Highly active field area allowance granted to members of armed forces (Subject to certain conditions and locations)
U/S Sec. 10(14)
Up to Rs. 4,200 per month
26Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)
U/S Sec. 10(14)
Up to Rs. 3,250 per month


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