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You are here: Home / Income Tax / List of Taxable and Non-Taxable elements of Pay

List of Taxable and Non-Taxable elements of Pay

July 25, 2016 pcadmin Leave a Comment

List of Taxable and Non-Taxable elements of Pay

Taxable Pay:

Provisions are applicable equally for monthly payment of Allowances as well as arrears for the said head of Pay/Allowances.

Sl. No. Taxable Elements of Pay
1 Pay in the Pay Band
2 Grade Pay
3 Military Service Pay
4 Dearness Allowance
5 Non-Practicing Allowance (if any)
6 Hazard/Special Hazard Pay
7 Para Allowance/Para Reserve Allowance/Special Commando Allowance
8 City Compensatory Allowance
9 Deputation (Duty) Allowance (If any)
10 Reimbursement of Furniture
11  Reimbursement of Water
12 Reimbursement of Electricity
13 Technical Allowance
14 Qualification Pay
15 Special Action Group Allowance (on posting to National Security Guard)
16 Technical Pay
17 Language Allowance
18 Qualification Grant
19 Language Award
20 Flying Allowance
21 Leave Encashment on LTC
22 Specialist Allowance
23 Test Pilot Allowance
24 Instructor Allowance
25  Flight Test Allowance
26 Security Allowance
27 Strategic Force Allowance

Non-Taxable Elements of Pay:

1. Provisions are applicable equally for monthly payment of Allowances as well as arrears for the said head of Pay/Allowances.
2. *Salary for this purpose includes Pay in Pay Band + Grade Pay + MSP (w.e.f. 01 Sep 08) + DA + NPA (if any).

Sl No. Non-Taxable element of Pay Authority Limit of Exemption
1 Gallantary Award A.O. 46/79;U/S 10 (18)(i) of IT Actsw.e.f. 1947 Fully Exempt
2 Entertainment Allowance U/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.01/04/89 Actual Expenditure upto the limit of entitlement
4 Foreign Allowance U/S 10 (7) of IT Act Fully Exempt
5 Bhutan Compensatory Allowance (BCA) AO 395/74and U/S 10(7) of IT Act Fully Exempt
6 Servant Wages Allowance along with BCA  AO 395/74 and U/S 10 (7) of IT Act Fully Exempt
7 Purchase of Crockery/Cutlery/Glassware U/S 10 (7) of IT Act Fully Exempt
8 Outfit allowance on posting to Embassy  U/S 10 (7) of IT Act Fully Exempt
9 Arrears of Cash Grant – Foreign Allowance (Nepal)  U/S 10 (7) of IT Act Fully Exempt
10 Myanmar Allowance U/S 10 (7) of IT Act Fully Exempt
11 Representation Grant for use of crockery set U/S 10 (7) of Act Fully Exempt
12 Encashment of Leave on retirement whether on superannuation/voluntary retirement/release/invalidment etc. U/S 10 (10AA) (i) of IT Act w.e.f. 01/04/78 Fully Exempt
13 House 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
14 Children Education Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl No.5 of the IT Rs.100/- per month per child upto a maximum of 2 children.
Rules
15 Hostel Subsidy U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl No.6 of the IT Rules, Rs.300/- per month per child
upto a maximum of 2 children
16  Siachen Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) –Table Sl No.1 (II) of Rs.7000/ per month w.e.f. 01/08/1997
the IT Rules
17 Special Compensatory (Remote Locality) Allowance U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.2 of the IT Category I – SCA ‘A’ – Rs.1300/- per month Category III – SCA ‘B’ –
Rules Rs.1050/- per month. Category IV – SCA ‘C’ – Rs.750/- per month. Category VI
  – SCA ‘D’ – Rs.200/- per month.
18 Compensatory Field Area Allowance  (CFAA) U/S 10 (14) (ii) of IT 2BB (2) – Table Sl No.7 of the IT Rules Rs.2600/- per month w.e.f.
Act and Rule 1/5/1999
19  Compensatory Modified Field  U/S 10 (14) (ii) of IT Act and Rs.1000/- per month w.e.f. 01/05/1999
Area Allowance (CMFAA) Rule 2BB (2) – Table Sl No.8 of the IT Rules
20 Any Special Allowance in the nature of Counter Insurgency Allowance  U/S 10 (14) (ii) of IT Act and Rs.3900/- per month w.e.f. 01/05/1999
(SCCIA) Rule 2BB (2) – Table Sl.No.9 of the IT Rules
21  Transport Allowance granted to U/S 10 (14) (ii) of IT Act and Rule 2BB (2) – Table Sl.No.10 of the  For whole of India – Rs.1600/-
meet expenditure for the purpose of commuting between place of residence and IT Rules per month
duty    
22  Transport Allowance granted to U/S 10 (14) (ii) of IT Act and Rule For Whole of India – Rs.3200/- per month 2BB (2) – Table Sl.No.11 of the
a blind or orthopedically handicapped employee with disability of lower IT Rules
extremities  to meet expenditure for  
the purpose of commuting between place of residence and duty  
23 High Altitude Uncongenial Climate Allowance (HAUCA) U/S 10 (14) (ii) of IT Act and Rule 2BB (2) Table Sl.No.13 of the IT For areas of (a)Altitude of 9000 to 15000 feet (HAUCA ‘I) – Rs.1060/-
Rules 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 U/S 10 (14) (ii) of IT Act and Rule 2BB (2) –Table Sl.No.14 of the IT Rs.4200/- per month
Allowance (HAFA) Rules
25 Island (duty) Allowance granted to the members of Armed Forces U/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.
26 Outfit Allowance (Initial/Renewal)  U/S 10 (14) (i) of IT Act and  Fully Exempt
Rule 2BB (1) (f) of IT Rules.
27 Compensation for the change of uniform U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT Rules Fully Exempt
28 . Kit Maintenance Allowance U/S 10 (14) (i) of IT Act and Rule 2 BB (1) (f) of the IT Rules  Fully Exempt
29 Uniform Allowance (MNS) U/S 10 (14) (i) of IT Act and Rule 2BB (1) (f) of the IT Rules Fully Exempt
30 Special Winter Uniform Allowance  U/S 10 (14) (i) of IT Act and  Fully Exempt
Rule 2BB (1) (f) of the IT Rules
31  Reimbursement of Medical U/S 17 (2) (viii) (v) of IT Act Actual expenditure upto Rs.15000/- per annum.
Expenses
32 Any payment from Provident Fund  U/S 10 (11) of IT Act Fully Exempt
33 Payment of Compensation – Disability Pension CBDT F.No. 200/51/99- ITA1 dated 02 Jul 2001 Fully 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.

Signed Copy

Filed Under: Income Tax

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