As per the current tax rules, what is the list of allowances that are tax-free within certain limits under Section 10 of the Income Tax Act? Furthermore, what is the maximum cap or limit for each allowance per month?
From India, Delhi
Acknowledge(0)
Amend(0)
1From India, Delhi
Acknowledge(0)Amend(0)
Tax-Free Allowances under Section 10 of the Income Tax Act
In India, Section 10 of the Income Tax Act provides for various allowances that are exempt from taxation up to certain limits. These allowances are designed to provide relief to employees by reducing their taxable income. Here is a list of common tax-free allowances along with their maximum limits per month as per the current provisions:
1. House Rent Allowance (HRA):
- HRA is exempt from tax subject to certain conditions.
- The exemption is the least of the following:
- Actual HRA received
- 50% of salary for individuals living in metro cities (40% for non-metro cities)
- Rent paid minus 10% of salary
2. Transport Allowance:
- Transport allowance up to ₹1,600 per month is exempt from tax.
3. Children Education Allowance:
- Children education allowance up to ₹100 per month per child (maximum of 2 children) is exempt.
4. Hostel Expenditure Allowance:
- Hostel expenditure allowance up to ₹300 per month per child (maximum of 2 children) is exempt.
5. Conveyance Allowance:
- Conveyance allowance up to ₹1,600 per month is exempt.
6. Medical Allowance:
- Medical allowance up to ₹15,000 per annum is exempt.
7. Leave Travel Allowance (LTA):
- LTA for domestic travel is exempt twice in a block of four years subject to certain conditions.
It is important to note that these allowances are subject to specific conditions and limits as per the Income Tax Act. Employees should ensure they meet the criteria set for each allowance to avail of the tax exemption benefits. For detailed information and any updates, it is advisable to refer directly to the Income Tax Act or consult with a tax professional to understand the latest provisions.
From India, Gurugram
Acknowledge(0)Amend(0)
In India, Section 10 of the Income Tax Act provides for various allowances that are exempt from taxation up to certain limits. These allowances are designed to provide relief to employees by reducing their taxable income. Here is a list of common tax-free allowances along with their maximum limits per month as per the current provisions:
1. House Rent Allowance (HRA):
- HRA is exempt from tax subject to certain conditions.
- The exemption is the least of the following:
- Actual HRA received
- 50% of salary for individuals living in metro cities (40% for non-metro cities)
- Rent paid minus 10% of salary
2. Transport Allowance:
- Transport allowance up to ₹1,600 per month is exempt from tax.
3. Children Education Allowance:
- Children education allowance up to ₹100 per month per child (maximum of 2 children) is exempt.
4. Hostel Expenditure Allowance:
- Hostel expenditure allowance up to ₹300 per month per child (maximum of 2 children) is exempt.
5. Conveyance Allowance:
- Conveyance allowance up to ₹1,600 per month is exempt.
6. Medical Allowance:
- Medical allowance up to ₹15,000 per annum is exempt.
7. Leave Travel Allowance (LTA):
- LTA for domestic travel is exempt twice in a block of four years subject to certain conditions.
It is important to note that these allowances are subject to specific conditions and limits as per the Income Tax Act. Employees should ensure they meet the criteria set for each allowance to avail of the tax exemption benefits. For detailed information and any updates, it is advisable to refer directly to the Income Tax Act or consult with a tax professional to understand the latest provisions.
From India, Gurugram
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.