allowance and their taxability
TRANSCRIPT
ADVANCED ACCOUNTING & TAXATION
(INCOME TAX)
Submitted by Guided by
Vijay Somase Prof Kopate mam
ALLOWANCE AND THEIR TAXABILITY
TYPES OF ALLOWANCES
• Fully Taxable Allowance• Fully Exempted Allowance• Partly exempted & Partly
Taxable
FULLY TAXABLE ALLOWANCE
1. Dearness Allowance (D.A)
2. Fix medical allowance
3. Tiffin allowance4. City compensatory
allowance5. Overtime Allowance
6. Entertainment allowance
7. Overtime allowance8. Non-practicing
allowance(For Doctors)
9. Other allowance Project Allowance Family Allowance
Servant Allowance
FULLY EXEMPTED ALLOWANCE
1. Foreign Allowance2. Allowance from UNO pay to it’s employee 3. Allowance to high court judge
PARTLY EXEMPTED AND PARTLY TAXABLE ALLOWANCE
House rent allowance (HRA)The lease of following amount is exempted from tax
a) Actual HRA receivedb) Rent paidc) Less – 10% of Salary {Basic salary + D.A. (if
admissible) + commission(fix percentage) }d) 40% of salary
( in case of Mumbai, Delhi, Chennai, Kolkata- 50% )
IN CASE OF PRIVATE EMPLOYEE
Valuation of unfurnished accommodation
City/ Place ofAccommodation
Where the Accommodation
owned by employer
Accommodation provide on rent
Population is more than 25 lakhs 15% of salary
Rent paid OR
15% of salary Whatever is less
Population between 25-10
lakhs10% of salary
Population less than
10 lakhs7.5% of salary
In hotel -24% of salary
Or Actual charges paid to hotel
Whichever is less
Thank you