Understanding Prescribed Allowances A Comprehensive Guide

S.No

Name of Allowance

Extent to which allowance is exempt

1.

Children Education Allowance

100 per month per child upto a maximum of two children

2.

Any transport allowance granted to an employee who is blind or deaf and dumb or orthopedically handicapped with disability of the lower extremities of the body, to meet his expenditure for commuting between his residence and place of duty

3,200 per month.

3.

Underground Allowance granted to an employee who is working in uncongenial, unnatural climate in underground mines.

800 per month

4.

Any special allowance in the nature of high Altitude allowance granted to the member of the armed forces operating in high altitude areas

For altitude of 9,000 to 15,000 feet

For above 15,000 feet

1060 Per Month

1600 Per Month

5.

Any allowance granted to an employee to meet the hostel expenditure on his child

300 per month per child upto a maximum of two   children

6.

Compensatory Field Area Allowance [Specified areas in Specified States]

2,600 per month

7.

Compensatory Modified Field Area Allowance [Specified areas in Specified States

1,000 per month

8.

Any Special Compensatory Allowance in the nature of Special Compensatory (Hilly Areas) Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow Bound Area Allowance or Avalanche Allowance

800 or 300 per month depending upon the specified locations

7,000 per month in Siachen area of Jammu and Kashmir

9.

Any Special Compensatory Allowance in the nature of border area allowance or remote locality allowance or difficult area allowance or disturbed area allowance

1,300 or 1,100  or 1,050 or 750 or 300 or 200 per month depending upon the specified locations

10.

Special Compensatory (Tribal Areas/Schedule Areas/Agency Areas) Allowance [Specified States]

200 per month

11.

Any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running such transport from one place to another, provided that such employee is not in receipt of daily allowance

70% of such allowance up to a maximum of 10,000 per month.

12.

House rent allowance HRA is a special allowance specifically granted to an employee by his employer towards payment of rent for residence of the employee.

HRA granted to an employee is exempt to the extent of least of the following:

1. HRA actually received for the relevant period.

2. Rent paid (-) 10% of salary for the relevant period.

3. 50% of salary for the relevant  period for Metro Cities and 40% of salary in other cities.

13.

Any special allowances in the nature of special compensatory highly active field area allowance granted to the member of the armed forces.

4,200 per month

14.

Any special allowances in the nature of Island (duty) allowance granted to the member of the armed force in Andaman and Nicobar and Lakshadweep group of island

3,250 per month