Is special allowance exempt from income tax?

Is special allowance tax exempted?

Any special allowance/benefit, not a perquisite, as per the meaning specified in clause (2) of Section 17, is granted for the employees to meet certain expenses wholly. … In these cases, the allowance provided is exempted from taxes.

Is there tax on special allowance?

Special allowances are paid on a monthly basis and are taxable. Special allowance can be divided into two categories, namely, personal allowances and official allowances. The maximum exemption is Rs. 1600 per month.

Which allowances are exempted from income tax?

There are various allowances exempt under Section 10 for Salaried Employees like House Rent Allowance, Leave Travel Allowance, Travelling Allowance, Uniform Allowance etc.

What is the exemption limit of special compensatory allowance?

SPECIAL ALLOWANCES – – Salary Income – Income Tax

Particulars Limit of Exemption
Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations) Amount exempt from tax varies from 300 per month to 7,000 per month.(for more information refer rule 2BB , Income-tax Rules, 1962
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What is exemption under section 10 & 17 in income tax?

Section 10 for salaried employees under the Income Tax Act covers a wide range of allowances ranging from house rent and leave travel allowance to research/academic allowance and uniform allowance. … Allowances are given to employees for their services or as compensation for working in unusual conditions.

What is other allowance in salary?

Any monetary benefit offered by the employer to its employees for meeting expenditures, over and above the basic salary are known as Salary Allowances. The employers offer various kinds of additional benefits in monetary terms to their employees over and above the basic salary, which are known as salary allowances.

What is the tax personal allowance?

The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

Is medical allowance fully taxable?

Medical allowance is a fixed component that you receive every month as part of your monthly salary, that is taxable as salary income. … Whereas Medical reimbursement is a tax-free component and as discussed above, it is exempted up to the amount spent by employee or Rs. 15,000 whichever is less.

How do I calculate my salary allowance?

Here the basic salary will be calculated as per follows Basic Salary + Dearness Allowance + HRA Allowance + conveyance allowance + entertainment allowance + medical insurance here the gross salary 660,000. The deduction will be Income tax and provident fund under which the net salary comes around 552,400 .

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What income is tax free?

Applicable for all individual tax payers:

Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both regimes.

What are the exemption for income tax 2020-21?

Income Tax Slab FY 2020-21 for a non-resident taxpayer who is 35 years of age with an income of ₹ 15,00,000. The no-tax limit or the basic exemption limit for non-residents is ₹2,50,000 irrespective of their age. This is in addition to the surcharge that is 10% of tax where the total income exceeds Rs.

How do I become tax exempt?

Salaried individuals, who live in a rented house/apartment, can claim house rent allowance or HRA to lower tax outgo. This can be partially or completely exempt from taxes. The income tax laws have prescribed a method for computing the HRA that can be claimed as an exemption. Read more about how to claim HRA exemption.

What is section 10 exemption under Income Tax?

The objective of section 10 of the Income Tax Act is to reduce the burden of the different structure of the tax such as rent allowance, allowance for children education, travel allowance, gratuity and so on. …

What is special compensatory allowance?

(a) “compensatory allowance” means an allowance granted to meet personal expenditure necessitated by the special circumstances in which duty is performed, but it does not include dearness allowance, sumptuary allowance, or any other allowance which is regulated by separate rules made from time to time under the All …

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Is uniform allowance exempt from income tax?

Under tax laws, an exemption has been granted for uniform allowance—given by an employer to employees. The exemption is for an allowance granted to meet the expenditure incurred on purchase or maintenance of uniform for the performance of the duties of an office or employment of profit.

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