Allowances or Exemptions available For Salaried For A. Y. 2018-19

Every taxpayer who are liable to file Income Tax Return under the head Salary do knows very well that what are the allowances / exemptions available under the head salary that help them to save tax 



Here we have made an efforts to Summarize all Allowances /Exemptions available 
under the head Salaries of Tax Payers for AY 2018-19 [ F Y 2017-18]

Allowances / Exemptions Under the head Salaries :
Sl. No. Section Particulars Limit of Exemptions Exemption Available To
1 10(7) Any allowance or perquisite paid or allowed by Government to its employees posted outside India Entire Amount Individual- Salaried Employee (being a citizen of India)
2   -  Allowances to Judges of High Court/Supreme Court Exempt, subject to certain conditions Individual – Judges of High Court/Supreme Court
3   -  Compensatory allowance received by a Judge under article 222(2) of the Constitution Fully Exempt
4   -  Salary and allowances received by a teacher /professor from SAARC member state (Subject to certain conditions). Fully Exempt
5 10(45)
Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:
a) Value of rent free official residence
b) Value of conveyance facilities including transport allowance
c) Sumptuary allowance

d) Leave travel concession
Fully Exempt
6 10(45) Allowances to Retired Chairman/Members of UPSC Exempt subject to maximum of Rs. 14,000 per month for defraying the services of an orderly and for meeting expenses incurred towards secretarial assistant on contract basis.
7    - 
Allowances paid by the UNO to its employees
Fully Exempt Individual – Government employee
Individual – Employees of UNO
8 16 (ii)
Entertainment Allowance received by the Government employees (Fully taxable in case of other employees)
Least of the following is exempt from tax:
a) Rs 5,000
b) 1/5th of salary (excluding any allowance, benefits or other perquisite)
c) Actual entertainment allowance received
Individual – Government Employee
9 10(13A) House Rent Allowance (Sec. 10(13A) & Rule 2A)
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].
Individual – Salaried employee
10 10(14) Children Education Allowance Up to Rs. 100 per month per child up to a maximum of 2 children is exempt Individual – Salaried employee
11 10(14) Hostel Expenditure Allowance Up to Rs. 300 per month per child up to a maximum of 2 children is exempt Individual – Salaried employee
12 10(14) Transport Allowance is granted to an employee to meet expenditure on commuting between place of residence and place of duty Up to Rs. 1,600 per month (Rs. 3,200 per month for blind, deaf, dumb and handicapped employees) is exempt Individual – Salaried employee
13 10(14) Allowance granted 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
Amount of exemption shall be lower of following:
a) 70% of such allowance; or
b) Rs. 10,000 per month
Individual – Salaried employee
14 10(14) Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee
15 10(14) Any Allowance to meet the cost of travel on tour or on transfer Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee
16 10(14) Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee
17 10(14) Helper/Assistant Allowance Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee
18 10(14) Research Allowance granted for encouraging the academic research and other professional pursuits Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee
19 10(14) Uniform Allowance Exempt to the extent of expenditure incurred for official purpose Individual – Salaried employee
20 10(14) Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations) Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month Individual – Salaried employee
21 Sec. 10(14) read with Rule 2BB Border area allowance Remote Locality or allowance or Disturbed Area allowance or Difficult Area Allowance (Subject to certain conditions and locations) Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month Individual – Salaried employee
22 Sec. 10(14) Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Orissa Up to Rs. 200 per month Individual – Salaried employee
23 Sec. 10(14) Compensatory 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) Up to Rs. 2,600 per month Individual – Salaried employee
24 Sec. 10(14) Compensatory 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) Up to Rs. 1,000 per month Individual – Salaried employee
25 Sec. 10(14) Counter Insurgency Allowance if this exemption is taken, employee cannot claim any exemption in respect of border area allowance (Subject to certain conditions and   locations) Up to Rs. 3,900 per month Individual – Salaried employee
26 Sec. 10(14) Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines Up to Rs. 800 per month Individual – Salaried employee
27 Sec. 10(14) High Altitude Allowance is granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)
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)
Individual – Members of Armed Forces
28 Sec. 10(14) Highly active field area allowance is granted to members of armed forces (Subject to certain conditions and locations) Up to Rs. 4,200 per month Individual – Members of Armed Forces
29 Sec. 10(14) Island Duty Allowance is granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations) Up to Rs. 3,250 per month Individual – Members of Armed Forces
30   -  City Compensatory Allowance Fully Taxable Individual – Salaried employee
31   -  Fixed Medical Allowance Fully Taxable Individual – Salaried employee
32   -  Tiffin/Lunch/Dinner/ Refreshment Allowance Fully Taxable Individual – Salaried employee
33   -  Servant Allowance Fully Taxable Individual – Salaried employee
34   -  Dearness Allowance Fully Taxable Individual – Salaried employee
35   -  Project Allowance Fully Taxable Individual – Salaried employee
36   -  Overtime Allowance Fully Taxable Individual – Salaried employee
37   -  Telephone Allowance Fully Taxable Individual – Salaried employee
38   -  Holiday Allowance Fully Taxable Individual – Salaried employee
39   -  Any Other Cash Allowance Fully Taxable Individual – Salaried employee

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