Monday, December 1, 2008

Salary:Taxable and Non-taxable allowances


on Monday, December 1, 2008

Allowance: means Fixed amount of money or other substance given monthly in addition to salary to meet the particular type of expenditure.

Treatment:Allowances are part of salary and taxable in hands of the assessee if no specific exemption is given under the Income Tax Act/Rules


  1. HRA(House Rent Allowance ) house rent allowance is exempted u/s 10(13A) of the income tax act.Least of the following is exempted from Hra Received(details is available here)
    • HRA received
    • House rent paid minus 10 % of salary(salary means basic plus dp plus da if term of employment so provides)
    • 50% of salary(same meaning as above)in case of rented house situated in Bombay,Madras,Delhi or calcutta
    • 40 % of salary ,if rented house is situated in any other places
  2.  City compensatory allowance :Fully taxable.
  3. Foreign Allowance :Exempt from tax if paid outside India By the government to the Indian citizen for rendering services outside India.
  4. Fixed medical allowance: Taxable.
  5. Project Allowance :Taxable.
  6. Allowances to Supreme court/High court Judges :Not taxable.
  7. Servant/helper Allowance :taxable ,if helper  used for official purpose then exempted..
  8. Transport Allowance: known also as LODA ,means allowance to meet expenses incurred for office to home and home to office is exempted up to 800 per month maximum.
  9. Tiffin Allowance :Taxable .
  10. Allowance to meet the cost of travel on tour or on transfer(including amount paid for packing and transportation of personal effects on such transfer):exempted  to the extent allowances used for said purpose.
  11. Allowance (know as DA in TA bill) paid for purpose explained in point 11 above ,to meet the ordinary daily charges on account of absence from his normal place of duty):exempted to the extent allowance used for the said purpose
  12. Conveyance allowance:To meet the expenditure on conveyance in performance of duties of an official nature:exempted to extent allowance used for said purpose
  13. Uniform allowance : exempted to the extent used for the said purpose
  14. Children Education allowance :Rs 100 per month per child up to maximum of two child is exempted if expenses made in India
  15. Children hostel allowance:Rs 300 per month per child up to maximum of two child is exempted if expenses made in India
  16. Allowance granted to employee working in transport system where no daily allowance has not been allowed to meet daily expenses ,done to meet his personal expenses during duty performance from one place to other place :70 % of such allowable exempted maximum up to 6000 per month.
  17. Allowance granted for encouraging the academic ,research and other professional pursuits:exempted to the extent used for said purpose
  18. many hilly area,remote area,field allowances are exempted on various rate
  19. Any other allowance :generally Taxable.
please comment
HRA CALCULATOR and details about HRA exemption Calculation
Download Complete List of allowances exempted u/s 10(14)

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  1. Yaa It's very nice information for me........

    thanks a lot...............

    ReplyDelete
  2. I am an emloyee of Govt. of Bihar. I want to know that DA is part of salary or not for the calculation of HRA.


    Satyendra Kumar
    Muzaffarpur.(BIHAR)

    ReplyDelete
    Replies
    1. Da Is part of salary for calculation of HRA for BIhar Govt also

      Delete
  3. I am a civil court employee. i get Rs.1515 per monthe HRA and I pay Rs.3000 per month as house rent.My Basic Pay is 15150 plus D.A. Rs.8787.
    How much amount will be exumpted as HRA from taxable Income.

    Kaushal Kishore
    Muzaffarpur.

    ReplyDelete
    Replies
    1. rent paid in excess of 10 % salary is exempted

      3000-10% (15150+8787)=3000-2393=607 Per month .This amount should be calculate on monthly basis as basic and da may vary from month to month.

      Delete
  4. My Basic Pay+Grade pay=Rs.15150, D.A.=Rs.8787 and HRA =Rs.1515 only.
    I spend Rs.3000 per month on house rent. What will be the HRA amount exempted under income tax.

    Sanjay Kumar
    Sitamarhi

    ReplyDelete
  5. rent paid in excess of 10 % salary is exempted

    3000-10% (15150+8787)=3000-2393=607 Per month .This amount should be calculate on monthly basis as basic and da may vary from month to month.

    ReplyDelete
  6. My ex-employer charged Rs. XXXXX/- for failing to serve mandatory notice period after resignation. (served 1 month instead of 3 months).

    My current employer agreed to reimburse the complete amount.

    Will the amount reimbursed to me is taxable as my income?

    ReplyDelete
    Replies
    1. Please Read detailed identical reply here

      http://www.simpletaxindia.net/2010/07/tax-treatment-of-notice-pay-in-income.html

      Delete
  7. Yaa It's very nice information for me........

    thanks a lot...............

    ReplyDelete
  8. Can you contact me at matt.s@24option.com
    ?

    ReplyDelete
  9. i have received payment of special allowance as prize for doing extra work of government worth rs 35000/*. Is it taxable or not ? Please send the answer on my email i d basant.kr.1961@gmail.com.

    ReplyDelete
  10. i am getting 25000 so plz tel me how can v show for tax exemption ...plz reply ravi1985auroville@yahoo.com

    ReplyDelete
    Replies
    1. 25000/- in what nature , pls provide details

      Delete
  11. I am in PB4 of central Govt. Organization. I have recently received a Top Up fellowship (Rs. 20,000/-) from a James Rennel Fellow position in addition of my existing salary. Is this top up fellowship is taxable? It is not a salary but fellowship.
    Kindly answer me at arunc@coral.iitkgp.ernet.in

    ReplyDelete
  12. thanks for the information

    ReplyDelete
  13. Dear Sir,

    I am a salaried teacher (assistant professor)in a private medical college. I would like to know if amount spent for registration in conferences (i.e. academic conferences) can be claimed for tax rebates. This amount is not reimbursed by the medical college so I think it does not come under academic allowance.
    Thanks
    Dr (Mrs) Omna Chawla

    ReplyDelete
  14. Dear......................
    Pay Tax for better Future of INDIA and INDIAN's.

    ReplyDelete
  15. I am not doing any job, so i believe i will not pay any thing as TAX.

    ReplyDelete
  16. Its really good information. D.R.Goswami.

    ReplyDelete
  17. I am a paramilitary force member I want to know whether ration allownce is taxable income or not

    ReplyDelete
  18. I am a central government employee. I know that TA (Rs.800) is exempted. But, is the Dearness Allowance on TA exempted or taxable? Please somebody answer. Thanks.

    ReplyDelete
  19. is the mobile allowance given to govt. employees taxable?

    ReplyDelete
    Replies
    1. Mobile allowance is taxable but phone facility is not taxable

      Delete
    2. hello raja babu please solve my problem, i am a employee i go 40000 power & fuel allowance in f.y.2012-13, please tell me that this is exempted or taxable whether i use this for office use and my personal use, then what will be in office use & personal use.

      Delete
  20. in the salary if medical allowance is revd 1000 p.m. then how much is taxable??

    ReplyDelete
    Replies
    1. excempted 15000/- per annum

      Delete
  21. Hello,

    My Salary is 25000
    1. Basic 11,500
    2. HRA 5,750
    3. DA 2,875
    4. Medical Allowance 2,000
    5. Transport Allowance 1,625
    6. Conveyance Allowance 1,250

    PLease help me to calculate my tax. Which all will be exempted?

    ReplyDelete
    Replies
    1. please provide rent paid per month by you (if any),amount of conveyance allowance used per month . Further what are your saving details like life insurance ,NSC ,ppf ,tuition fees of children etc

      Delete
    2. Hello Mr Raja Babu....
      thanks for forwarding your helping hand.

      1. No, i dont pay any HRA, i live in own house
      2. i dont use any conveyance allowance
      3. Yes I have LIC policy of Rs 30065 pa and no other savings

      Please advise

      Delete
    3. total income =25000*12=300000
      less :transport allowance 800*12=9600
      less :conven all(to the extent used )=0
      balance taxable=290400
      less :lic pre u/s 80C=30065
      net taxable income=260335

      tax for financial year 2012-13
      exempted =200000
      balance=60335
      tax @ 10 =6034 +3 % cess181=6215

      tax for financial year 2013-14
      exempted =220000
      balance=40335
      tax @ 10 =4034 +3 % cess121=4155

      Delete
    4. Hello Mr Raja Babu

      Thanks alot for helping me for that.

      Delete
  22. hello Raju,
    my salry is 22000, hence plz assist me how to rebate the tax
    am providng 7000 as monthly rent.plz calculate the tax according to this.

    BASIC 8,870.00
    DA 440.00
    HRA 4,440.00
    TRANSPORT 800.00
    PROJECT AL 1,770.00
    SPL. ALLOW 710.00
    PROF. DEVP 1,330.00
    ACADEMIC A 1,330.00
    PERIODICAL 1,060.00
    MedICAL AL 1250

    Many thanks for yuor attention.




    ReplyDelete
  23. hi,

    Apart from salary I am getting


    Early Morning Shift Allowance- Rs.300 / Per day
    Travel Allowance- Rs.250 / Per day

    Is it Fully taxable and any suggestions to reduce tax. I am getting salary of 20K per month (excluding these allowances).

    And Maximum How many times i can claim for my Leave Travel Allowance and is there any limit for that.

    Regards,
    Hem

    ReplyDelete
    Replies
    1. Shift allowance is fully taxable.
      travel allowance is exempted to the extent it is being used for official purpose.

      Delete
    2. lta information available here

      http://www.simpletaxindia.net/2009/01/leave-travel-concessionassitance-ltaltc.html

      Delete
  24. Hi

    I am getting Basic Rs19500
    HRA Rs9750
    Transport AllowanceRs800
    Speciall Allowance Rs2450
    Other Allowance Rs4000(Fixed/month)
    (Travelling Conveyance,Mobile,Internet)

    My Investment under 80C- Rs100000
    Medical Insurance under 80D-Rs7884
    House Rent Receipt- Rs8000/month

    Kindly inimate the Total Taxable amount & Total TAX Deduction after investment.

    Regards
    Amit Sahoo

    ReplyDelete
  25. I had got Leave Encashment(Earned Leave)amount of Rs.19663 and Ex-gratia(Bonus for 2months) was Rs.36792 for the FY 2012-13. My total salary exclude the both of above and after deducting Prof Tax was Rs.247586/- The both Leave Encashment and Ex-gratia are taxable or not?
    and I was sold Pnb Tax Saver fund in this FY1213 for Rs.20787 which was bought in FY0708 and I get Long Term Capital Loss of Rs.16265/-(=Sale Con 20787 - cost of Aqu Rs.37000- stt Rs 52) is this Loss duduct in total income fully? or carry frwd to next AYr.

    My Salary
    Basic Salary 221250
    Add: D.A 9461
    Add: H.R.A 13275
    Add: Other Allowance 6000
    Less: Professional Tax (-) 2400
    Total Gross Salary 247586

    Income from other Source
    1) Comn Recd from Various Mutual Funds Sales 28083

    Investments in Mutual Funds
    b) 1) Fidelity Tax Advantage Fund (12000+8229) 20229
    2) DSP ML Tax Saver Fund 2396
    3) Principal Personal Tax Saver Fund 20735
    4) Religare India Tax Plan 0
    5) Kotak Tax Scheme 0
    6) BSL Tax Relief ’96 Fund (36000+20500jnt) 56500
    Total of (a) + (b1+b2+b3+b4+b5+b6) 99860

    a) Long Term Capital Loss
    Principal Personal Tax Saver Mutual Fund
    Sale Consideration 20787
    Less: Cost of Acquisition - 37000
    Less: S.T.T.paid - 52
    Total of (a) - 16265
    Less: Exemption u/s.54/54B/54D/54EC/54F 16265

    TOTAL TAXABLE INCOME 159544

    IS THIS CALCULATION CORRECT?

    ReplyDelete
  26. I had got Leave Encashment(Earned Leave)amount of Rs.19663 and Ex-gratia(Bonus for 2months) was Rs.36792 for the FY 2012-13. My total salary exclude the both of above and after deducting Prof Tax was Rs.247586/- The both Leave Encashment and Ex-gratia are taxable or not?
    and I was sold Pnb Tax Saver fund in this FY1213 for Rs.20787 which was bought in FY0708 and I get Long Term Capital Loss of Rs.16265/-(=Sale Con 20787 - cost of Aqu Rs.37000- stt Rs 52) is this Loss to be duduct in total income fully? or partly carry frwd to next AYr.

    My Salary
    Basic Salary 221250
    Add: D.A 9461
    Add: H.R.A 13275
    Add: Other Allowance 6000
    Less: Professional Tax (-) 2400
    Total Gross Salary 247586

    Income from other Source
    1) Comn Recd from Various Mutual Funds Sales 28083

    Investments in Mutual Funds
    b) 1) Fidelity Tax Advantage Fund (12000+8229) 20229
    2) DSP ML Tax Saver Fund 2396
    3) Principal Personal Tax Saver Fund 20735
    4) Religare India Tax Plan 0
    5) Kotak Tax Scheme 0
    6) BSL Tax Relief ’96 Fund (36000+20500jnt) 56500
    Total of (a) + (b1+b2+b3+b4+b5+b6) 99860

    a) Long Term Capital Loss
    Principal Personal Tax Saver Mutual Fund
    Sale Consideration 20787
    Less: Cost of Acquisition - 37000
    Less: S.T.T.paid - 52
    Total of (a) - 16265
    Less: Exemption u/s.54/54B/54D/54EC/54F 16265

    TOTAL TAXABLE INCOME 159544

    IS THIS CALCULATION CORRECT?

    ReplyDelete
    Replies
    1. Bonus ex gratia and leave encasment both are taxable under salaries.

      Loss on tax saving mutual funds can not be adjusted against any other income or carry forwarded being an exempted income.

      so your salary income should be 247586 plus 19663 plus 36792=304041

      and income from mf commission =28083

      total =332124

      less 99860 (80C)

      net taxable income =232264

      Delete
    2. thank you sir, for your valueable information

      Delete
  27. My salary after deduction of PF and Prf Tx was Rs.2,21,500/- I had invested in MF ELSS in FY1213 for Rs.48000/- and I was earned LTCG on redemption of Equity Growth Fund in this FY1213 of Rs.5,01,620/- which I was made investment of Rs.10,000/- in FY1994-95. My question is, the LTCG on sale of Equity MF is fully exempted or not.Do I pay the any tax on exceeds of tax limit. Are their any solutions to avoid tax payment for large amount of my long term earnings. kindly do proper suggestion in this regard.

    ReplyDelete
  28. I am a employee in LTD. co and i need form.16 my basic salary is 8200 and i have got net salary 11999. i have require form 16 . and send mail to company but Sr.tax manager not a issue form 16.
    form 16 is relates to annual salary paid by company to the employee.

    i need form 16 please give me suggest .

    ReplyDelete
  29. I am a pvt co employee. I got salary of Rs 232000/- I had paid Prof Tax for Rs 2400/- and the Provident Fund amount which deducted from my salary was invested in Mutual Fund Tax Saving Scheme with locking period for 3years. The PF amount being Invested in MF is exempted or taxable under head of salary. please give suggestion.

    ReplyDelete
    Replies
    1. pf AMOUNT your share is deductible under section 80C
      Profession tax is deductible from salary it self under section 16(iii)

      Tax saving mutual fund is deductible under section 80C

      Delete
  30. I working for company in India
    i have salary slip
    Base pay - 8000
    Allowance - 5500
    City Allowance -400
    Deduction==
    PT -200
    PF @12%-960
    Pls confirm Amount stated as Allowance is taxable or not
    if taxable can i remove 800 per month as convence allowance for deduction
    As there is no TDS we have to compute tax our self and pay tax

    Thanks in advance

    ReplyDelete
    Replies
    1. You taxable income is less than exemption limit of 200000 ,so no tax payable by you

      Delete
  31. I had got salary for the FY12-13 was Rs.246760/- and I was earned interest on Fixed Deposit and Recurring Deposit(Cumulative Deposit) for Rs.40635/- for the same FY. and I was paid LIC premium of Rs.37541/- and invested in MF ELSS Tax Saving scheme of Rs.48000/-.
    What is my taxable income? kindly clarify whether interest earned on deposits is come under taxable income?

    YASHWANTH.

    ReplyDelete
    Replies
    1. Interest on RD and FDR is taxable in your hand .

      so your taxable income will be 246760+40635-37541-48000=201854

      Further your salary may have few allowances like conveyance allowance ,HRA which are exempted from tax so take in to account that also and deduct from salary income

      Delete
  32. Mr .Sahu , a government employee and citizen of india ,was sent to london on official duty ,on 01 -06 -2011 . He stayed there upto 31 -01 -2012 .Salary and allowance drawn by him during this period are : 4 months salary in india Rs. 200000,8 months salary in London Rs. 360000, overseas allowance Rs. 240000, free residence in London( Rent Rs.40000 per month for 8 months)Rs .320000 he has house property situated in Delhi which is self occupied. during his stay in london his wife and children were staying in this property thriughout previous year. Fair rental value of house is Rs. 56000, he has paid Rs. 6000 as municipal taxes and Rs.2000 as ground rent during the year .He received dividend from indian company RS.2200 , he has donated sum of RS.60000 to institution to which section 80 G is applicable . Compute his total income for assessment year 2012 - 2013

    ReplyDelete
  33. Sir,
    Is Risk Allowance taxable or non taxable income?
    Need answer with reference..
    Thanking You

    ReplyDelete
  34. PLEASE CLARIFY US FOR MOBILE ALLOWANCE TAXABLE OR NOT?

    ReplyDelete
    Replies
    1. This is taxable .
      As per income tax act/rules all allowances are taxable if no specific exemption is provided .

      This allowance is not covered in section 10(14)(i) or section 10(14)(ii)
      read more here
      http://www.simpletaxindia.net/2014/02/taxable-and-non-taxable-allowances.html

      Delete
  35. hi iam the employee of LTD thrugh CNF my salary is 22000/- is fixed.how much amount is deducted on tds.plz clarify.

    ReplyDelete
    Replies
    1. 22000*12=264000 Income tax 264000 =6400after section 87A (-2000) =4400 plus cess 3 %=4400+132=4532.

      The above tax calculation is subject to following
      1. That you are working as an employee not as professional
      2. You have no other income and not eligible for other deduction . -

      Delete