List of Taxable Elements of Pay and Allowance

List of Taxable Elements of Pay and Allowance

Taxable Elements 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
1Pay in the Pay Band
2Grade Pay
3Military Service Pay
4Dearness Allowance
5Non-Practicing Allowance (if any)
6Hazard/Special Hazard Pay
7Para Allowance/Para Reserve Allowance/Special Commando Allowance
8City Compensatory Allowance
9Deputation (Duty) Allowance (If any)
10Reimbursement of Furniture
11 Reimbursement of Water
12Reimbursement of Electricity
13Technical Allowance
14Qualification Pay
15Special Action Group Allowance (on posting to National Security Gaurd)
16Technical Pay
17Language Allowance
18Qualification Grant
19Language Award
20Flying Allowance
21Leave Encashment on LTC
22Specialist Allowance
23Test Pilot Allowance
24Instructor Allowance
25 Flight Test Allowance
26Security Allowance
27Strategic Force Allowance
Sl No.Non-Taxable element of PayAuthorityLimit of Exemption
1Gallantary AwardA.O. 46/79;U/S 10 (18)(i) of IT Actsw.e.f. 1947Fully Exempt
2Entertainment AllowanceU/S 16 (ii) of IT Act w.e.f.01/04/81 A 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
4Foreign AllowanceU/S 10 (7) of IT ActFully Exempt
5Bhutan Compensatory Allowance (BCA)AO 395/74and U/S 10(7) of IT ActFully Exempt
6Servant Wages Allowance along with BCA AO 395/74 and U/S 10 (7) of IT ActFully Exempt
7Purchase of Crockery/Cutlery/GlasswareU/S 10 (7) of IT ActFully Exempt
8Outfit allowance on posting to Embassy U/S 10 (7) of IT ActFully Exempt
9Arrears of Cash Grant – Foreign Allowance (Nepal) U/S 10 (7) of IT ActFully Exempt
10Myanmar AllowanceU/S 10 (7) of IT ActFully Exempt
11Representation Grant for use of crockery setU/S 10 (7) of ActFully Exempt
12Encashment 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
13House 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
14Children Education AllowanceU/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl No.5 of the IT RulesRs.100/- per month per child upto a maximum of 2 children.
15Hostel 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 RulesRs.7000/ per month w.e.f. 01/08/1997
17Special Compensatory (Remote Locality) AllowanceU/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.2 of the IT RulesCategory 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.
18Compensatory 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 RulesRs.1000/- per month w.e.f. 01/05/1999
20Any 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 RulesRs.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 dutyU/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 dutyU/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
23High Altitude Uncongenial Climate Allowance (HAUCA)U/S 10 (14) (ii) of IT Act and Rule 2BB (2) Table Sl.No.13 of the IT RulesFor 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 RulesRs.4200/- per month
25Island (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.
26Outfit Allowance (Initial/Renewal) U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of IT Rules. Fully Exempt
27Compensation for the change of uniformU/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT RulesFully Exempt
28Kit Maintenance AllowanceU/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of the IT Rules Fully Exempt
29Uniform Allowance (MNS)U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT RulesFully Exempt
30Special Winter Uniform Allowance U/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 expenditure upto Rs.15000/- per annum.
32Any payment from Provident Fund U/S 10 (11) of IT ActFully Exempt
33Payment 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

READ: Clarification of the Definition of Members of Family – DOPT Order

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