Hi!!! Priyashiva
I hope this helps u....I think a list of partially exempt allowances will make it a little easy 4u 2understand how to go about it coz it did help me when I was working on the salary structure of my organization.....I do have a list of fully taxable allowances if u need I'll post it....
Regards
Himani
PARTIALLY EXEMPT ALLOWANCES
This category includes allowances which are exempt upto certain limit. For certain allowances, exemption is dependent on amount of allowance spent for the purpose for which it was received and for other allowances, there is a fixed limit of exemption.
(i) House Rent Allowance (H.R.A.)
An allowance granted to a person by his employer to meet expenditure incurred on payment of rent in respect of residential accommodation occupied by him is exempt from tax to the extent of least of the following three amounts:
a) House Rent Allowance actually received by the assesses
b) Excess of rent paid by the assesses over 10% of salary due to him
c) An amount equal to 50% of salary due to assesses (If accommodation is situated in Mumbai, Kolkata, Delhi, and Chennai)
‘Or’ an amount equal to 40% of salary (if accommodation is situated in any other place).
Salary for this purpose includes Basic Salary, Dearness Allowance (if it forms part of salary for the purpose of retirement benefits) ,Commission based on fixed percentage of turnover achieved by the employee.
The exemption of HRA depends upon the following factors:
(1) Basic Salary (3) Rent paid
(2) Place of residence (4) HRA received
Section 16 (ii).
(i) Special Allowances for meeting official expenditure
Certain allowances are given to the employees to meet expenses incurred exclusively in performance of official duties and hence are exempt to the extent actually incurred for the purpose for which it is given. These include traveling allowance, daily allowance, conveyance allowance, helper allowance, research allowance and uniform allowance.
(ii) Special Allowances to meet personal expenses
There are certain allowances given to the employees for specific personal purposes and the amount of exemption is fixed i.e. not dependent on actual expenditure incurred in this regard. These allowances include:
a) Children Education Allowance
This allowance is exempt to the extent of Rs.100 per month per child for maximum of 2 children (grand children are not considered).
b) Children Hostel Allowance
Any allowance granted to an employee to meet the hostel expenditure on his child is exempt to the extent of Rs.300 per month per child for maximum of 2 children.
c) Transport Allowance
This allowance is generally given to government employees to compensate the cost incurred in commuting between place of residence and place of work. An amount uptoRs.800 per month paid is exempt. However, in case of blind and orthopaedically handicapped persons, it is exempt up to Rs.1600p.m.