List of Income Tax Exempted Income including various Allowances for Defence Personnel

Income Tax Return FIling

Filing income tax is important for citizens including Govt servants, soldiers and veterans/pensioners. In this article you will get a comprehensive list of allowances and component of pay which is exempted from paying income tax in full or part of the pay.

TAX  EXEMPTION ON FOLLOWING PAY & ALLOWANCES

Ser NoType of Pay or AllowanceAuthority for Exemption Exemption  Limit
 Gallantry AwardAO 46/79 U/S 10(18) (i) of IT Acts wef 1947Fully Exempt
 Entertainment AliceU/S 16(ii) of IT Act wef 01 Apr 1981A sums equal to 1 /5th of salary (excl any allce/ benefit) or Rs 5000/- per annum whichever is less
 Leave Travel Concession (LTC)U/S 10(5) of IT Act wef 01 Apr 1989Actual Expenditure upto the limit of entitlement
 Foreign AliceU/S 10(7) of IT ActFully Exempt
 Bhutan                          Compensatory Alice (BCA)AO 395/74 and U/S 10(7) of IT ActFully Exempt
 Servant                         Wages               Alice alongwith BCAAO 395/74 and U/S 10(7) of IT ActFully Exempt
 Purchase             of                                               Crockery/ Cutlery/ GlasswareU/S 10(7) of IT ActFully Exempt
 Outfit Alice on posting to EmbassyU/S 10(7) of IT ActFully Exempt
 Arrears of Cash Grant — Foreign Alice (Nepal)U/S 10(7) of IT ActFully Exempt
 Myanmar AliceU/S 10(7) of IT ActFully Exempt
 Representation              Grant         for use of crockery setU/S 10(7) of IT ActFully Exempt
 Encashment             of                        Lve                            on retirement              whether             on superannuation/                   voluntary retirement/                             release/ invalidment etcU/S 10 (10AA) (i) of IT Act wef 01 Apr 1978Fully Exempt
 House Rent Alice/ House Rent Reimbursement (HRA/HRR)U/S 10(13A0 of IT Act wef 06 Oct 1964; Limit of exemption as per Rule 2A of IT RulesExemption 1uantum :- For Mumbai/ Kolkata/ Delhi/Chennai  (metro Cities)
>  Alice actually recd. > Rent paid in excess of 10% of salary. > 50% of salary. For other cities:-
> Alice actually recd. > Rent paid in excess of 10% of salary. > 40% of salary.
Income Tax Exemption Rules for Defence Pensioners
Ser NoType of Pay or AllowanceAuthority for Exemption Exemption  Limit
No   
14.Children Edn AliceU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 5 of the IT Rules
Rs 100/- per month per child upto a max of 2 children.
15.Hostel SubsidyU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 6 of the IT Rules
Rs 300/- per month per child upto a max of 2 children.
16.Siachen AliceU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 1 (II) of the IT Rules
Rs 7000/- per month wef 01 Aug 1997
17.Spl Compensatory (Remote Locality) AliceU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 2 of the IT Rules
Cat I — SCA ‘A’ — Rs 1300/- per month Cat III — SCA ‘B’ — Rs 1050/- per month Cat IV — SCA ‘C’ — Rs 750/- per month Cat VI — SCA ‘D’ — Rs 200/- per month
18.Compensatory      Field             Area Alice (CFAA)U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 7 of the IT Rules
Rs 2600/- per month wef 01 May 1999
19.Compensatory Mod Fd Area Alice (CMFAA)U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 8 of the IT Rules
Rs 1000/- per month wef 01 May 1999
20.Any Spl Alice in the nature of Counter Insurgency Alice (SCCIA)U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 9 of the IT Rules
Rs 3900/- per month wef 01 May 1999
21.Tpt Alice gtd to meet expdr for the purpose of commuting between place of residence and dutyU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 10 of the IT Rules
For whole of India — Rs 1600/-per month
22.Tpt Alice gtd to a blind or orthopedically handicapped emp with disability of lower extremities, to meet expdr for the purpose of commuting between place of residence and dutyU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No 11 of the IT Rules
For whole of India — Rs 3200/-per month
23.High                       Altitude      Uncongenial Climate Alice (HAUCA) PayU/S 10 (14) (ii) of IT Act and Rule 2BB (2) — Table Ser No 13 of the IT RulesFor area of Altitude of 9000 to 15000 ft (HAUCA ‘I’) — Rs 1060/- per month wef 01 May 1999.Altitude above 15000/- ft (HAUCA ‘II’ & ‘III’) Rs 1600/- per month wef 01 May 1999.
Ser NoNon-taxable    element        ofAuthLimit of Exemption
   
24.Highly Active Fd Area Alice (HAF)U/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No
14 of the IT Rules
Rs 4200/- per month
25.Island (duty) Alice gtd to the members of Armed ForcesU/S 10 (14) (ii) of IT Act and
Rule 2BB (2) — Table Ser No
15 of the IT Rules
For Andaman & Nicobar and Lakshadweep group of Islands — Rs 3250/- per month inserted wef 29 Feb 2000
26.Outfit                  Alice          (Initial           / Renewal)U/S 10 (14) (i) of IT Act and
Rule 2BB 1 (f) of the 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 Rules
Fully Exempt
28.Kit Maint AliceU/S 10 (14) (i) of IT Act and
Rule 2BB 1 (f) of the IT Rules
Fully Exempt
29.Uniform Alice (MNS)U/S 10 (14) (i) of IT Act and
Rule 2BB 1 (f) of the IT Rules
Fully Exempt
30.Spl Winter Uniform AliceU/S 10 (14) (i) of IT Act and
Rule 2BB 1 (f) of the IT Rules
Fully Exempt
31.Reimbursement of Medical ExpensesU/S 17 (2) (viii) (v) of IT ActActual       expdr       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-ITA 1 dt 02 Jul 2001Fully Exempt
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