Friends,
Salaried employees are being eligible for exemption of certain allowances that are being provided to them by the employer. Allowances are generally made exempt for the purpose of providing a better condition for living and make full use of the allowances that are being provided to them by the employer.
Various allowances that are being exempt in the hands of the salaries employees are educational allowance, leave travel allowance, HRA (house Rent allowance), Conveyance or Transport allowance, Free Education Allowance and many more, pertaining to certain restriction in connection with the availability of the said exemption.
When we talk about the most popular allowance that is being exempt in the hands of the salaried employees then we mostly talk about LTA (Leave Travel Allowance), HRA (House Rent Allowance) and Conveyance or travel Allowance, as they are the most common allowance that are being paid to the employee by the employer on a regular basis.
LTA (Leave Travel Allowance) is being paid to the employee by the employer on leaving to any place situated in the territory of India during the period of his service or can be after the employee has been retired from the service. This is being exempt under section 10(5) read along with the rule 2B. There are various provisions restricting the allowances being exempt to a limited number of trips. An employee is liable to an exemption of two trips from a period of four years and there is also a condition that if a person fails to avail such concession he can avail it in the next year but only once.
A person availing the benefit can take along with him his family. Here the family shall include his spouse, children (only two children born after 1st day of October, 1998), his Parents, brothers and sisters who are at present dependent on the employee for their living.
In case of HRA (House rent Allowance) the exemption can be claimed by an employee if he is living in a rented house and is getting a HRA from the employer. Exemption is being talked about under section 10(13A) in accordance with rule 2A
HRA is being calculated as the least of the actual amount received half of the salary if staying in any metropolitan and 40 percent in case of any other cities or the excess of the rent above 10 percent of the salary for the period and is available of the month for which the rent has actually been paid. Here the word Salary includes “Salary plus Dearness allowance plus Commission (a fixed percentage on the turnover of the company)”.
In case of Conveyance or travel allowance Rupees Nine thousand Six Hundred is being exempt in the hand of each and every employee irrespective of the amount actually spent by the employee, here no proof is required for claiming the exemption.
These are supposed to be the major allowances that are being exempt in the hands of the employee provided to them by the employer.
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Various allowances that are being exempt in the hands of the salaries employees are educational allowance, leave travel allowance, HRA (house Rent allowance), Conveyance or Transport allowance, Free Education Allowance and many more, pertaining to certain restriction in connection with the availability of the said exemption.
When we talk about the most popular allowance that is being exempt in the hands of the salaried employees then we mostly talk about LTA (Leave Travel Allowance), HRA (House Rent Allowance) and Conveyance or travel Allowance, as they are the most common allowance that are being paid to the employee by the employer on a regular basis.LTA (Leave Travel Allowance) is being paid to the employee by the employer on leaving to any place situated in the territory of India during the period of his service or can be after the employee has been retired from the service. This is being exempt under section 10(5) read along with the rule 2B. There are various provisions restricting the allowances being exempt to a limited number of trips. An employee is liable to an exemption of two trips from a period of four years and there is also a condition that if a person fails to avail such concession he can avail it in the next year but only once.
A person availing the benefit can take along with him his family. Here the family shall include his spouse, children (only two children born after 1st day of October, 1998), his Parents, brothers and sisters who are at present dependent on the employee for their living.
In case of HRA (House rent Allowance) the exemption can be claimed by an employee if he is living in a rented house and is getting a HRA from the employer. Exemption is being talked about under section 10(13A) in accordance with rule 2A
HRA is being calculated as the least of the actual amount received half of the salary if staying in any metropolitan and 40 percent in case of any other cities or the excess of the rent above 10 percent of the salary for the period and is available of the month for which the rent has actually been paid. Here the word Salary includes “Salary plus Dearness allowance plus Commission (a fixed percentage on the turnover of the company)”.
In case of Conveyance or travel allowance Rupees Nine thousand Six Hundred is being exempt in the hand of each and every employee irrespective of the amount actually spent by the employee, here no proof is required for claiming the exemption.
These are supposed to be the major allowances that are being exempt in the hands of the employee provided to them by the employer.
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