As per Rule 2BB in Income Tax Rules, 1962 various other allowances have also been made completely exempt from tax. Some of such allowances are described below: Special Compensatory (Hill Areas) Allowance up to 300 per month at a place located at a height of 1,000 mtrs. or more above sea level.

What is the exemption limit of special compensatory allowance?

SPECIAL ALLOWANCES – – Salary Income – Income Tax

What is the maximum tax exemption limit for compensation received?

3. Exemption on Receipts at the Time of Voluntary Retirement. b. Maximum compensation received does not exceed Rs 5,00,000.

Is compensatory allowance taxable?

Under the Income Tax Laws, City Compensatory Allowance or CCA is fully taxable, without any exemptions. For income tax computation, CCA will be added to the income of the employee and tax would be calculated as per the applicable taxation rate.

Which income is exempt from tax under section 10?

Income Exempt From Tax As Per Section 10

What is fully exempted allowance?

Certain categories of taxes are fully exempted such as allowances given to judges at the Supreme Court and the High Courts. Allowances such as house rent allowance are partially exempted as per Section 10(13A). Other allowances such as city compensatory allowance are fully taxable.

Which allowances are tax exempt?

Children Education Allowance: If you are receiving children education allowance from your employer then you are eligible to claim a tax exemption under the Income-tax Act. However, the maximum amount exempted is Rs. 100 per month or Rs. 1200 per annum for a maximum of up to 2 children.

Is uniform allowance exempt from income tax?

Under tax laws, an exemption has been granted for uniform allowance—given by an employer to employees. The exemption is for an allowance granted to meet the expenditure incurred on purchase or maintenance of uniform for the performance of the duties of an office or employment of profit.

How much special compensatory allowance is exempt from tax?

Special Compensatory (Hill Areas) Allowance up to 300 per month at a place located at a height of 1,000 mtrs. or more above sea level. Any special compensatory allowance in the nature of border area allowance or remote area allowance or difficult area allowance or disturbed area allowance is fully exempted from tax upto. Rs.

How much is exempt from tax in hilly areas?

Exempt to the extent of expenditure incurred for official purposes Individual – Salaried employee 3. Sec. 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.

How many compensatory allowances can I claim per month?

Some of such allowances are described below: Special Compensatory (Hill Areas) Allowance up to 300 per month at a place located at a height of 1,000 mtrs. or more above sea level.

Is the city compensatory allowance ( CCA ) taxable?

As such, there are no applicable maximum or minimum limits of CCA that can be offered to an employee. Under the Income Tax Laws, City Compensatory Allowance or CCA is fully taxable, without any exemptions. For income tax computation, CCA will be added to the income of the employee and tax would be calculated as per the applicable taxation rate.