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Allowances
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Exemption Limit
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Children Education Allowance
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Up to Rs. 100 per month per child up to a maximum of 2 children is exempt
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Hostel Expenditure Allowance
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Up to Rs. 300 per month per child up to a maximum of 2 children is exempt
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Transport Allowance granted to an employee to meet expenditure on commuting between place of residence and place of duty
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Up to Rs. 1,600 per month (Rs. 3,200 per month for blind and handicapped employees) is exempt
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Allowance granted 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
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Amount of exemption shall be lower of following:
a) 70% of such allowance; or
b) Rs. 10,000 per month
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Conveyance Allowance granted to meet the expenditure on conveyance in performance of duties of an office
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Exempt to the extent of expenditure incurred for official purposes
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Travelling Allowance to meet the cost of travel on tour or on transfer
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Exempt to the extent of expenditure incurred for official purposes
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Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty
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Exempt to the extent of expenditure incurred for official purposes
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Helper/Assistant Allowance
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Exempt to the extent of expenditure incurred for official purposes
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Research Allowance granted for encouraging the academic research and other professional pursuits
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Exempt to the extent of expenditure incurred for official purposes
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Uniform Allowance
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Exempt to the extent of expenditure incurred for official purposes
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Special compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations)
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Amount exempt from tax varies from Rs. 300 to Rs. 7,000 per month.
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Border area, Remote Locality or Disturbed Area or Difficult Area Allowance (Subject to certain conditions and locations)
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Amount exempt from tax varies from Rs. 200 to Rs. 1,300 per month.
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Tribal area allowance in (a) Madhya Pradesh (b) Tamil Nadu (c) Uttar Pradesh (d) Karnataka (e) Tripura (f) Assam (g) West Bengal (h) Bihar (i) Orissa
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Up to Rs. 200 per month
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Compensatory Field Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance(Subject to certain conditions and locations)
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Up to Rs. 2,600 per month
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Compensatory Modified Area Allowance. If this exemption is taken, employee cannot claim any exemption in respect of border area allowance(Subject to certain conditions and locations)
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Up to Rs. 1,000 per month
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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 (Subject to certain conditions and locations)
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Up to Rs. 3,900 per month
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Underground Allowance to employees working in uncongenial, unnatural climate in underground mines
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Up to Rs. 800 per month
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High Altitude Allowance granted to armed forces operating in high altitude areas (Subject to certain conditions and locations)
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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)
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Highly active field area allowance granted to members of armed forces (Subject to certain conditions and locations)
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Up to Rs. 4,200 per month
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Island Duty Allowance granted to members of armed forces in Andaman and Nicobar and Lakshadweep group of Island (Subject to certain conditions and locations)
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Up to Rs. 3,250 per month
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