Special allowance exemption limits depend on rent paid, salary, and location-based percentage of salary. Limits are prescribed for excluding from total income the special allowance covered by Schedule III [Table: Sl. No. 11] to the Act. The exempt amount is the least of the actual allowance received, the excess of rent over one-tenth of salary, or a prescribed percentage of salary based on the place of employment, being 50% for specified cities and 40% for other places. The rule also defines the relevant period and provides that salary includes dearness allowance but excludes other allowances and perquisites.