https://www.taxtmi.com/caselaws?id=37702 City compensatory allowance paid by reason of the place of posting, and intended to offset higher personal living costs, does not qualify for exemption under section 10(14) of the Income-tax Act, 1961. The allowance must be linked to the nature of duties and satisfy the requirement that it be incurred wholly, necessarily and exclusively in performance of those duties; a payment meeting personal expenses at the place where duties are ordinarily performed falls outside the exemption because of the retrospective Explanation inserted by the Finance Act No. 25 of 1975. On that basis, the allowance was held taxable and the exemption claim failed. en-us Mon, 21 Aug 1978 00:00:00 +0530 Wed, 31 Mar 2010 15:35:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37702 City compensatory allowance paid by reason of the place of posting, and intended to offset higher personal living costs, does not qualify for exemption under section 10(14) of the Income-tax Act, 1961. The allowance must be linked to the nature of duties and satisfy the requirement that it be incurred wholly, necessarily and exclusively in performance of those duties; a payment meeting personal expenses at the place where duties are ordinarily performed falls outside the exemption because of the retrospective Explanation inserted by the Finance Act No. 25 of 1975. On that basis, the allowance was held taxable and the exemption claim failed. Case-Laws Income Tax Mon, 21 Aug 1978 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37702