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ALLOWANCES UNDER SALARY
- 1. ALLOWANCE S UNDER SALARY FURQAN JAVEED SYED PES1PG21MB405 1
- 2. WHAT IS AN ALLOWANCE? Fixed monetary payments for a specific purpose is known as allowance. An allowance is the financial benefit given to the employee by the employer over and above the regular salary. These benefits are provided to cover expenses which may be incurred to facilitate the discharge of service. 2
- 3. ALLOWANCE Allowances are generally calculated on basic salary. Basic salary is the fixed salary, invariable, minimum wages, mandatory pair, fixed by the company to pay the employees. 3
- 4. TYPES OF ALLOWANCE 4 Fully Taxable Partly Taxable Allowances Fully Exempt
- 5. 5 FULLY TAXABLE ALLOWANCE Dearness Allowance DA City Compensatory Allowance Medical Allowance Tiffin / lunch / dinner Allowance Servant Allowance Warden Allowance Non-Practicing Allowance Family Allowance Deputation Allowance Over-time Allowance Hill Allowance
- 6. FULLY EXEMPTED ALLOWAN CE 6 Foreign allowances for Govt employees Allowances to High court and Supreme Court judges Allowances to United Nation organization (UNO).
- 7. PARTIALLY EXEMPTED ALLOWANC E House rental Allowance Entertainment Allowance Uniform Allowance Helper Allowance Academic Allowance Transport Allowance Hill Allowance Tribal area Allowance Children Education Allowance Children hostel Allowance Underground Allowance Free Lunch Allowance exempt up to Rs 50 per day 7
- 8. PARTIALLY EXEMPTED ALLOWANCE They are of three type •Category 1:Received or spent (whichever is less) •Category 2: Received or limit (whichever is less) •Category 3: House Rent allowance (HRA) 8
- 9. CATEGORY 1: Received or Spent (whichever is less) 9 Conveyance Allowances Academy Allowances Traveling/ transfer Allowance Helper Allowance Uniform Allowance Daily Allowance Eg: Received Rs 10,000 Spent 8500 Taxable 8500
- 10. CATEGORY 2: Received or Limit (whichever is less) 10 • Exempted up to Rs.100/- per month per child (up to maximum 2 children) CHILDREN EDUCATION ALLOWANCES: • Exempted up to Rs.300/- per month per child (up to maximum 2 children) HOSTEL ALLOWANCE: • Exempted up to Rs.1600/- per month • For handicap employees Rs.3200/- per month TRANSPORT ALLOWANCE:
- 11. CATEGORY 2: Received or Limit (whichever is less) 11 ALLOWANCES TO TRANSPORT EMPLOYEES & PERSONAL (EXPENDITURE) ALLOWANCE (OR) ANY RUNNING FLIGHT ALLOWANCE: • The amount of exemption is Rs.10,000 p.m. or 70% of such allowances (whichever is less) HILLY AREA / BORDER AREAS / REMOTE AREAS ALLOWANCES: • The amount of exemption is Rs.300 – Rs.7000 per month
- 12. CATEGOR Y 2: Received or Limit (whichever is less) 12 • Rs. 200/- per month. TRIBAL AREA ALLOWANCE: • These are granted to employees working in uncongenial, unnatural climate in under-ground coal mines. • Exempt up to Rs. 800 per month. UNDER GROUND ALLOWANCES:
- 13. CATEGORY 3: HOUSE RENT ALLOWANCE (HRA) Least of the following shall be exempted: • Actual Amount (HRA) received. • Rent Paid less 10% of the Salary. • 50% or 40% of the salary. 13
- 14. THANK YOU 14