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Taxable and Non-taxable allowances

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  • HRA(House Rent Allowance )

Least of the following is exempted from HRA Received

1)HRA received

2) House rent paid minus 10 % of salary(salary means basic plus dp plus da if term of employment so provides)

- 50% of salary(same meaning as above)in case of rented house situated in Bombay,Madras,Delhi or calcutta

-40 % of salary ,if rented house is situated in any other places

  • City compensatory allowance :Fully taxable.
  • Foreign Allowance :Exempt from IT if paid outside India By the government for services outside India.
  • Fixed medical allownace:Taxable.
  • Project Allowance : taxable.
  • Transport Allowance : Exempted up to 800 per month maximum.
  • Tiffin Allowance :Taxable .
  • Allowance to meet the cost of travel on tour or on transfer : exempted to the extent allowances used for said purpose.

Daily Allowance (know as DA or Daily Allowance in TA bill to meet the ordinary daily charges on account of absence from his normal place of duty) : Exempted to the extent allowance used for the said purpose

  • Conveyance allowance : To meet the expenditure on conveyance in performance of duties of an official nature:exempted to extent allowance used for said purpose
  • Uniform allowance : exempted to the extent used for the said purpose
  • Children Education allowance : Rs 100 per month per child up to maximum of two child is exempted if expenses made in India
  • Children hostel allowance : Rs 300 per month per child up to maximum of two child is exempted if expenses made in India
  • Many hilly area,remote area,field allowances are exempted on various rate
  • Any other allowance :generally Taxable.

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