Monday, July 25, 2016

Taxable and Non-Taxable Elements of Pay and Allowances

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Taxable and Non-Taxable Elements of Pay and Allowances

List of Taxable Elements of Pay

Taxable Element of Pay : Provisions are applicable equally for monthly payment of Allowances as well as arrears for the said head of Pay/Allowances.

Non-Taxable Elements of Pay : Salary for this purpose includes Pay in Pay Band + Grade Pay + MSP (w.e.f. 01 Sep 08) + DA + NPA (if any).
Sl. No.Taxable Elements of Pay
1.Pay in the Pay Band
2.Grade Pay
3.Military Service Pay
4.Dearness Allowance
5.Non-Practicing Allowance (if any)
6.Hazard/Special Hazard Pay
7.Para Allowance/Para Reserve Allowance/Special Commando Allowance
8.City Compensatory Allowance
9.Deputation (Duty) Allowance (If any)
10.Reimbursement of Furniture
11.Reimbursement of Water
12.Reimbursement of Electricity
13.Technical Allowance
14.Qualification Pay
15.Special Action Group Allowance (on posting to National Security
Guard)
16.Technical Pay
17.Language Allowance
18.Qualification Grant
19.Language Award
20.Flying Allowance
21.Leave Encashment on LTC
22.Specialist Allowance
23.Test Pilot Allowance
24.Instructor Allowance
25.Flight Test Allowance
26.Security Allowance
27.Strategic Force Allowance
Sl No.Non-Taxable element of PayAuthorityLimit of Exemption
1.Gallantary AwardA.O. 46/79;U/S 10 (18)(i) of IT Actsw.e.f. 1947Fully Exempt
2.Entertainment AllowanceU/S 16 (ii) of IT Act w.e.f.01/04/81A sums equal to1/5th of
salary(excluding any allowance/benefit) orRs.5000/- per annum whichever isless.
3.Leave Travel Concession (LTC)U/S 10 (5) of IT Act w.e.f.01/04/89Actual Expenditure upto the limit of entitlement
4.Foreign AllowanceU/S 10 (7) of IT ActFully Exempt
5.Bhutan Compensatory Allowance (BCA)AO 395/74and U/S 10(7) of IT ActFully Exempt
6.Servant Wages Allowance along with BCAAO 395/74 and U/S 10 (7) of IT
Act		Fully Exempt
7.Purchase of Crockery/Cutlery/GlasswareU/S 10 (7) of IT ActFully Exempt
8.Outfit allowance on posting to EmbassyU/S 10 (7) of IT ActFully Exempt
9.Arrears of Cash Grant – Foreign Allowance (Nepal)U/S 10 (7) of IT ActFully Exempt
10.Myanmar AllowanceU/S 10 (7) of IT ActFully Exempt
11.Representation Grant for use of crockery setU/S 10 (7) of ActFully Exempt
12.Encashment of Leave on retirement whether on superannuation/voluntary
retirement/release/invalidment etc.		U/S 10 (10AA) (i) of IT Act w.e.f. 01/04/78Fully Exempt
13.House Rent Allowance/House Rent Reimbursement (HRA/HRR)U/S 10 (13A) of IT Act w.e.f. 06/10/1964;
Limit of exemption as per Rule 2A of IT Rules		*Quantum of exemption is least of the following – a) For
Bombay/Kolkata/Delhi Chennai i) Allowance actually received. ii) Rent paid in
excess of 10% of salary iii) 50% of salary b) For other cities i) Allowance
actually received. ii) Rent paid in excess of 10% of salary. iii) 40% of
salary
14.Children Education AllowanceU/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl No.5 of the IT
Rules		Rs.100/- per month per child upto a maximum of 2 children.
15.Hostel SubsidyU/S 10 (14) (ii) of IT Act and Rule2BB (2) – Table Sl No.6 of the IT Rules, Rs.300/- per month per child
upto a maximum of 2 children
16.Siachen AllowanceU/S 10 (14) (ii) of IT Act and Rule 2BB (2) –Table Sl No.1 (II) of
the IT Rules		Rs.7000/ per month w.e.f. 01/08/1997
17.Special Compensatory (Remote Locality) AllowanceU/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.2 of the IT
Rules		Category I – SCA ‘A’ – Rs.1300/- per month Category III – SCA ‘B’ –
Rs.1050/- per month. Category IV – SCA ‘C’ – Rs.750/- per month. Category VI
– SCA ‘D’ – Rs.200/- per month.
18.Compensatory Field Area Allowance(CFAA) U/S 10 (14) (ii) of IT
Act and Rule		2BB (2) – Table Sl No.7 of the IT Rules Rs.2600/- per month w.e.f.
01/05/1999
19.Compensatory Modified Field
Area Allowance (CMFAA)		U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) – Table Sl No.8 of the IT Rules		Rs.1000/- per month w.e.f. 01/05/1999
20.Any Special Allowance in the nature of Counter Insurgency Allowance
(SCCIA)		U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) – Table Sl.No.9 of the IT Rules		Rs.3900/- per month w.e.f. 01/05/1999
21.Transport Allowance granted to
meet expenditure for the purpose of commuting between place of residence and
duty		U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.10 of the
IT Rules		For whole of India – Rs.1600/-
per month
22.Transport Allowance granted to
a blind or orthopedically handicapped employee with disability of lower
extremities to meet expenditure for
the purpose of commuting between place of residence and duty		U/S 10 (14) (ii) of IT Act and RuleFor Whole of India – Rs.3200/- per month 2BB (2) – Table Sl.No.11 of the
IT Rules
23.High Altitude Uncongenial Climate Allowance (HAUCA)U/S 10 (14) (ii) of IT Act and Rule 2BB (2) Table Sl.No.13 of the IT
Rules		For areas of (a)Altitude of 9000 to 15000 feet (HAUCA ‘I) – Rs.1060/-
per month w.e.f. 01/05/1999. (b)Altitude above 15000 feet (HAUCA ‘II’ &
‘III) – Rs.1600/- per month w.e.f. 01/05/1999.
24.Highly Active Field Area
Allowance (HAFA)		U/S 10 (14) (ii) of IT Act and Rule 2BB (2) –Table Sl.No.14 of the IT
Rules		Rs.4200/- per month
25.Island (duty) Allowance granted to the members of Armed ForcesU/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.15 of the
IT Rules.		For Andaman & Nicobar and Lakshadweep group of islands –
Rs.3250/- per month inserted w.e.f. 29/02/2000.
26.Outfit Allowance (Initial/Renewal)U/S 10 (14) (i) of IT Act and
Rule 2BB (1) (f) of IT Rules.		Fully Exempt
27.Compensation for the change of uniformU/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT RulesFully Exempt
28. Kit Maintenance AllowanceU/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of the IT RulesFully Exempt
29.Uniform Allowance (MNS)U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT RulesFully Exempt
30.Special Winter Uniform AllowanceU/S 10 (14) (i) of IT Act and
Rule 2BB (1) (f) of the IT Rules		Fully Exempt
31.Reimbursement of Medical
Expenses		U/S 17 (2) (viii) (v) of IT ActActual expenditure upto Rs.15000/- per annum.
32.Any payment from Provident FundU/S 10 (11) of IT ActFully Exempt
33.Payment of Compensation – Disability PensionCBDT F.No. 200/51/99- ITA1 dated 02 Jul 2001Fully Exempt.

DISCLAIMER: The above provisions are with the understanding and interpretation of IT Act 1961/IT Rules as amended and instructions issued by CBDT from time to time. Rules, provisions, further amendments and clarifications are issued by IT department/CBDT only and this office does not have any role in framing the same except IT deductions at source with reference to them.

Authority: www.pcdaopune.gov.in

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