Allowances are fixed periodic amounts which are paid by an employer to employees for the purpose of meeting some particular expenditure whether personal or for the performance of duties.
Allowances are taxable on due or receipt basis, whichever is earlier.
Treatment of allowances under default tax regime u/s 115BAC
| Sr. No. | Fully taxable | Partly exempt | fully exempt |
|---|---|---|---|
| 1 | Dearness Allowance | Travelling Allowance | Allowance to Government employee outside India [u/s 10(7)] |
| 2 | City Compensatory Allowance | Conveyance Allowance | |
| 3 | Fixed Medical Allowance | Daily Allowance | |
| 4 | Entertainment Allowance | Transport Allowance to blind/deaf and dumb/orthopedically handicapped employee | |
| 5 | Overtime Allowance | ||
| 6 | Servant Allowance | ||
| 7 | Project Allowance | ||
| 8 | Interim Allowance | ||
| 9 | Tiffin/Lunch/Dinner Allowance | ||
| 10 | Warden Allowance | ||
| 11 | Non-practicing Allowance | ||
| 12 | Any Cash Allowance | ||
| 13 | House Rent Allowance [u/s 10(13A)] | ||
| 14 | Transport Allowance to employee other than blind/deaf and dumb/orthopedically handicapped employee | ||
| 15 | Helper Allowance | ||
| 16. | Research Allowance | ||
| 17 | Uniform Allowance | ||
| 18 | Special Compensatory (Hill Areas) Allowance | ||
| 19 | Special Compensatory [Border Area/Difficulty/Remote Locality/Disturb Area /Tribal/Schedule/Agency /Field /Modified Field Areas Allowance | ||
| 20 | Any Special Allowance | ||
| 21 | Underground Allowance | ||
| 22 | Exempt only in Optional Tax Regime- Allowance to Supreme Court/High Court Judges Allowance received from UNO Sumptuary Allowance |