Download - Allowance and their taxability
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ADVANCED ACCOUNTING & TAXATION
(INCOME TAX)
Submitted by Guided by
Vijay Somase Prof Kopate mam
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ALLOWANCE AND THEIR TAXABILITY
TYPES OF ALLOWANCES
• Fully Taxable Allowance• Fully Exempted Allowance• Partly exempted & Partly
Taxable
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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
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FULLY EXEMPTED ALLOWANCE
1. Foreign Allowance2. Allowance from UNO pay to it’s employee 3. Allowance to high court judge
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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% )
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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
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Thank you