Allowances available to Salaried Persons A.Y. 2022-23
Nature of Allowance |
Details of Allowance |
Benefits on allowance under Income tax Act. |
House Rent Allowance |
House Rent Allowance [Section 10(13A)] |
Least of the following is exempt (House Rent Allowance): 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]. |
Children Education Allowance |
Children Education Allowance [Section 10(14)] |
Up to Rs. 100 per month per child up to a maximum of 2 children is exempt (Children Education Allowance). |
Hostel Expenditure Allowance |
Hostel Expenditure Allowance [Section 10(14)] |
Up to Rs. 300 per month per child up to a maximum of 2 children is exempt (Hostel Expenditure Allowance). |
Transport Allowance |
Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between place of residence and place of duty [Section 10(14)] |
Rs. 3,200 per month granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with disability of lower extremities (Transport Allowance). |
Transport Allowance |
Transport 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. [Section 10(14)] |
Amount of exemption in respect of Transport Allowance shall be lower of following: a) 70% of such allowance; or b) Rs. 10,000 per month. |
Conveyance Allowance |
Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office [Section 10(14)] |
Exempt to the extent of expenditure incurred in respect of Conveyance Allowance. |
Other Allowance |
Any Allowance granted to meet the cost of travel on tour or on transfer [Section 10(14)] |
Exempt to the extent of expenditure incurred. |
Daily Allowance |
Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty [Section 10(14)] |
Exempt to the extent of expenditure incurred in respect of Daily Allowance. |
Helper Allowance |
Helper/Assistant Allowance [Section 10(14)] |
Exempt to the extent of expenditure incurred (Helper/Assistant Allowance) |
Research Allowance |
Research Allowance granted for encouraging the academic research and other professional pursuits [Section 10(14)] |
Exempt to the extent of expenditure incurred. (Research Allowance) |
Uniform Allowance |
Uniform Allowance [Section 10(14)] |
Exempt to the extent of expenditure incurred. (Uniform Allowance) |
Foreign allowances |
Foreign allowances or perquisites paid or allowed by Government to its employees (an Indian citizen) posted outside India [Section 10(7)] |
Fully Exempt. (Uniform Allowance) |
Allowances to serving Chairman/Member of UPSC |
Following allowances and perquisites given to serving Chairman/Member of UPSC is exempt from tax:[Section 10(45)] (1) Value of rent free official residence (2) Value of conveyance facilities including transport allowancec (3) Sumptuary allowanced (4) Leave travel concession |
Fully Exempt. |
Allowances paid by the UNO |
Allowances paid by the UNO to its employees |
Fully Exempt. |
Special compensatory Allowance |
Special compensatory Allowance (Hilly Areas)[Section 10(14)] |
Amount exempt from tax varies from Rs. 300 per month to Rs. 7,000 per month. (Special compensatory Allowance) |
Border area allowances |
Border area allowances, Remote Locality allowance or Disturbed Area allowance or Difficult Area Allowance [Section 10(14)] |
Amount exempt from tax varies from Rs. 200 per month to Rs. 1,300 per month. (Border area allowances) |
Compensatory Field Area Allowance |
Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance [Section 10(14)] |
Rs. 2,600 per month. (Compensatory Field Area Allowance) |
Tribal area allowance |
Tribal 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 [Section 10(14)] |
Rs. 200 per month. (Tribal area allowance) |
Underground Allowance |
Underground Allowance is granted to employees working in uncongenial, unnatural climate in underground mines [Section 10(14)] |
Up to Rs. 800 per month. (Underground Allowance) |
Compensatory Modified Area Allowance |
Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance [Section 10(14)] |
Rs. 1,000 per month. (Compensatory Modified Area Allowance) |
Counter Insurgency Allowance |
Counter 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 [Section 10(14)] |
Rs. 3,900 per month (Counter Insurgency Allowance) |
Highly active field area allowance |
Highly active field area allowance granted to members of armed forces [Section 10(14)] |
Up to Rs. 4,200 per month (Highly active field area allowance) |
High Altitude Allowance |
High Altitude Allowance is granted to armed forces operating in high altitude areas [Section 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) |
Allowances to Judges |
Allowances to Judges of High Court/Supreme Court |
Fully Exempt. |
Island Duty Allowance |
Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island [Section 10(14)] |
Up to Rs. 3,250 per month |
Allowances to Retired Chairman/Members of UPSC |
Allowances to Retired Chairman/Members of UPSC [Section 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. |