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Exemption of allowances(urgent)

V. Shruti (student cwa final) (70 Points)

26 December 2010

I want to know the exemptions and/or deductions for the following allowances given by a Central Govt. Organisation to its employees:- - Professional Development & Newspaper Allowance, -House maintenance Allowance(Differentiated from HRA). Please reply soon. Its urgent. Thanking you in anticipation.

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tarak nath shaw (Audit Clerks) (45 Points)
Replied 27 December 2010

If there is a relation of Employer & Employee with Central Govt. & you then your income tax taxable under the head of “Salary”.

1. Professional Development & Newspaper Allowance: - As such there is no provision of exemption under sec- 10 of income Tax act .

Logic :- Employer can misuse nomenclature & give you a Tax Free Salary though this.

2. House maintenance Allowance : - There is no provision for Govt. Employee in regard for getting exemption under the act. A General Provision Is Given Here :

Under sections 10(13A) of Income Tax Act, 1961 allowance is defined as an amount received by an employee paid by his/ her employer as a rent of his/her house. It is a taxable income. There is no exemption in tax if he is living in his own house or house for which he is not paying rent. There are following amount which are exempt from tax:

• Actual house rent paid by that individual

• Rent paid for the accommodation over 10% of the salary

• 50% of the salary if house is placed at Delhi, Mumbai, Kolkata, Chennai or 40% of the salary in it is placed in any other city.

3. House maintenance Allowance (Differentiated from HRA):- House maintenance allowance can be express as for repairs & maintaining of a own House or a rented house, whereas House rent allowance is given to those employee who has not own house in city where he is working so employer providing HRA to meet the cost of rented house.

I hope your Query would be solve………………..

Thanks

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V. Shruti (student cwa final) (70 Points)
Replied 02 January 2011

Thank you for replying,

But actually i wanted to know that if there is any kind of provision for exemption of these allowances,specifically House maintenance allowance.

By 'differentiated by HRA' I meant that House maintenance allowance is given along with HRA and House maintenance allowance is not equivalent/same as HRA

Vivek Raju P (Manager) (614 Points)
Replied 02 January 2011

There are very limited exemptions for allowances under income from the head salaries. Majorly HRA, Conveyance Allowance, Medical allowance, LTA etc... it is upto the employer to be very creative and introduce new nomenclature for the allowances. The only thing is that all these will be taxable without ant exemption.

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