Hi Anil,
I presume you are speaking about income being tax free for the employee...
Firstly, "allowances" cannot be tax free, you would need to have only "reimbursements" which are tax free.
You could have petrol reimbursements wherein you will need to pay the employee on receipt of bills. You can also have the following:
Books and Periodicals Reimbursement
Medical Reimbursement
Driver Salary Reimbursement
One thing that you will have to check would be if these reimbursements would result in the employer paying Fringe Benefits Tax.
Hope this helps u....
Chanchal