Taxability of allowances received by persons having income under the head ``Salaries''.

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....llowance, education allowance, refreshment allowance, dinner allowance, health allowance, holiday allowance, special qualification allowance, etc., are "income" in the hands of the employee, unless specifically exempted under the Income-tax Act, 1961, or any other statute. 2. The major exemptions in respect of allowances given by the Income-tax Act, 1961, are as under :_ (i) House rent allowance : Under section 10(13A) of the Income-tax Act, any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from income-tax to the extent, as may be prescribed, having regard to the area....

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....inarily resides or to compensate him for the increased cost of living, which the Central Government may specify by notification in the Official Gazette. However, the allowance, referred to in (b) above, should not be in the nature of a personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment, unless such allowance is related to his place of posting or residence. By Notifications Nos. S.O. 143(E), dated 21-2-1989 (see [1982] 176 ITR (St.) 132), S.O. 144(E), dated 21-2-1989 (see [1989] 176 ITR (St.) 133) (as amended by Notifications Nos. S.O. 259(E), dated 27-3-1990 (see [1990] 183 ITR (St.) 3), S.O. 487(E), dated 1-7-1992 (see [1992] 196 ITR (S....

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....ce or employment of profit ; (j) any allowance granted for encouraging academic research and any other professional pursuit ; (k) any allowance granted to meet the expenses incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit ; (l) children education allowance ; (m) any allowance granted to any employee to meet the hostel expenditure of his child ; (n) allowance granted to an employee working in a transport system to meet his personal expenses during his duty performed in the course of running of such transport from one place to another. In the notifications issued under section 10(14) of the Act, only the nature of the allowances which are exempt from ta....