SPECIAL ALLOWANCES - Section 10(14) & Rule 2BB Part 1

Children Education Allowance

Ø  Purpose: of education of children. Children education allowance is given to meet the expenses of education of children

Ø  Exemption: Exemption is available for maximum two children. Least of the following two figures is available as exemption irrespective of the expenditure incurred:

Ø  Rs 100 per month per child; or ,

Ø  Amount received from the employer

Hostel Expenditure Allowance

•               Purpose: Hostel expenditure allowance is given to meet the expenses of hostel accommodation of children.

•               Exemptions : Exemption is available for maximum two children least of the two figures is available as exemption irrespective of the expenditure incurred:

Ø  Rs 300 per month per child; or

Ø  Amount received from the employer .

Outstation Allowance

Ø  Purpose: Outstation allowance is given to employees of transport system in lieu of daily allowance- for meeting the expenditure incurred during the performance of duties in the course of running of such transport system from one place to another.

Ø  Exemption: Least of the following two figures is available as exemption irrespective of the expenditure incurred:

Ø  70% of outstation allowance received from the employer; or

Ø  Rs 10,000 per month

Note: If an employee of transport system receives both daily allowance as well as outstation allowance, outstation allowance shall be fully taxable. Exemption is available in respect of daily allowance to the extent it has been actually spent.

Underground Allowance

Ø  Purpose: Underground allowance is given to employees working in unnatural climate in underground mines.

Ø  Exemption: Least of the following two figures is available as exemption:

Ø  Rs 800 per month; or

Ø  Amount received from the employer

Tribal Area Allowance

•               Purpose : Tribal area allowance is given to employees working in specified tribal areas,