Home Other Partially Exempt Allowances
The Income Tax Act provides partial exemptions on specific allowances granted to employees for meeting certain expenses or working in specific conditions. These exemptions aim to provide tax relief while accounting for the nature of employment and living conditions. Below is a list of commonly recognized partially exempt allowances and their corresponding exemption limits:
| S.No | Nature of Allowance | Exemption Limit Specified |
|---|---|---|
| 1 | Compensatory Allowances for Hilly Area or High Altitude Allowance | Rs. 300 pm to Rs. 7,000 pm |
| 2 | Border Area, Remote Area Allowance | Rs. 200 pm to Rs. 1,300 pm |
| 3 | Allowances allowed to Transport Employees | Rs. 10,000 or 70% of Such Allowance, Whichever is less |
| 4 | Children Education Allowance | Rs. 100 pm per child upto maximum 2 children |
| 5 | Hostel Expenditure Allowance | Rs. 300 pm per child upto maximum 2 children |
| 6 | Transport Allowance | Rs. 3,200 per month for blind or deaf and dumb |
| 7 | Underground allowance to employee working in underground mines | Rs. 800 pm |
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The employers can list the abovementioned salary components as part of salaries offered to their employees.
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