Any prescribed special allowance or benefit other than perquisites specifically granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties are exempt to the extent to which such expense are actually incurred for that purpose. For this purpose following special allowances have been prescribed –

• Any allowance granted to meet the cost of travel on tour or on transfer. For this purpose it includes any sum paid in connection with transfer, packing and transportation of personal effects on such transfer.
• Any allowance, whether granted period on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.
• Any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit, provided that free conveyance is not provided by the employer.
• Any allowance granted to meet the expenditure incurred on a helper, where such helper is engaged for the performance of duties of an office or employment of profit.
• Any allowance granted for encouraging the academic, research and training pursuits in educational and research institutions.
• Any allowance to meet the expenditure on the purchase or maintenance of uniform for wear during the performance of duties of an office or employment of profit.

Any prescribed allowance granted to the assessee to meet his personal expense at a place of his duty or residence or to compensate him for the increased cost of living to the extent to which such expense are actually incurred for that purpose. For this purpose following special allowances have been prescribed –

• Special Compensatory (hilly areas) Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow Bound Areas Allowance or Avalanche Allowance is exempt for specified places from Rs. 300 p.m. to Rs. 7,000 p.m. depending on the place.
• Special Compensatory (Tribal Areas/Schedule Areas/Agency Areas) Allowance is exempt for specified places @ Rs. 200 p.m.
• Any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place, provided that such employee is not in receipt of daily allowance is exempt @ 70% of such allowance upto a maximum limit of Rs. 6000 p.m.
• Children education allowance is exempt @ Rs. 100 per month per child up to a maximum of two children.
• Any allowance granted to an employee to meet the hostel expenditure on his child is exempt @ Rs. 300 per month per child up to a maximum of two children.
• Compensatory Field Area Allowance is exempt for specified places @ Rs. 2600 p.m.
• Compensatory Modified Field Area Allowance is exempt for specified places @ Rs. 1000 p.m.
• Any special allowance in the nature of counter-insurgency allowance granted to the members of armed forces operating in areas away from their permanent locations is exempt @ Rs. 3900 p.m.
• Transport Allowance granted to an employee to meet his expenditure for the purpose of commuting between place of his residence and the place of his duty is exempt @ Rs. 800/- per month.
• Transport Allowance granted to an employee, who is blind or orthopaedically handicapped with disability of lower extremities to meet his expenditure for the purpose of commuting between place of his residence and the place of his duty is exempt @ Rs. 1,600/- per month.
• Persons working in underground mines in uncongenial and unnatural climate and in receipt of underground allowance, such allowance is exempt to the extent of Rs. 800 p.m.
• High altitude (uncongenial climate) allowance received by member of armed forces is exempt to the extent of Rs. 1060 p.m. for members operating in between altitude of 9000 to 15000 feet and Rs. 1600 p.m. for altitude above 15000 feet.
• Any special allowance granted to the members of the armed forces in the nature of special compensatory highly active field area allowance is exempt upto Rs. 4200 p.m.
• Any special allowance granted to the members of the armed forces in the nature of island (duty) allowance for persons posted at Andaman and Nicobar and Lakshadweep group of islands is exempt upto Rs. 3250 p.m.

Taxmantra.com is here to solve all your tax worries, be it relating to Tax Returns, Tax Support or Tax Planning.  Just contact us; we are here to relieve you from all your tax worries.

Taxmantra.com provides most hassle free tax return filing/ online return filing experience. Once you have collected, your salary certificate and other documents, we request you to please log in to www.taxmantra.com/ereturns or you can also directly mail at info@taxmantra.com to submit the details. Upon receiving the documents, we would contact you to file your return of income.