ALLOWANCES EXEMPTED UNDER SECTION 10(14)(ii) OF INCOME TAX ACT

The following allowances are exempt under section 10(14) (ii), subject to the
limits stated there-against:-
i. Special Compensatory Allowance or High Altitude Allowance or
Uncongenial Climate Allowance or Snow bound Area Allowance or
Avalanche Allowance:- Rs. 800/- common for various areas of North East,
Hilly areas of U.P., H.P. and J &K (for specific details about the areas
eligible for the allowance, please refer to the section 10(14) if I T Rules
1962) and Rs. 7000/- per month for Siachen area of J & K and Rs. 300/-
common for all places at a height of 1000 mts or more other than the
above places.
ii. Special Compensatory Allowance in the nature of Border Area Allowance
or Remote Locality Allowance or Difficult Area Allowance or Disturbed
Area Allowance:- Various amounts ranging from Rs. 200/- per month to
Rs. 1300/- per month are exempt for various areas as specified in Rule
2BB.
iii. Special Compensatory (Tribal Area/Scheduled Area/Agency Area
Allowance available in M.P., TN, U.P., Karnataka, Tripura, Assam, West
Bengal, Bihar, Orissa:- Rs. 200/- per month.
iv. Any allowance granted to an employee working in any transport system to
meet his personal expenditure during duty performed in the course of
running of such transport from one place to another:
70% of such allowance upto a maximum of Rs. 6000/- per month.
v. Children Education allowance:- Rs. 100/- per month per child upto a
maximum of 2 children.
vi. Allowance granted to meet Hostel Expenditure of children:- Rs. 300/- per
month per child upto a maximum of two children.
vii. Compensatory Field Area Allowance available in various areas of
Arunachal Pradesh, Manipur Nagaland, Sikkim, H.P., U.P. & J&K (for
specific details about the areas eligible for the allowance, please refer to
the section 10(14) if I T Rules 1962): - Rs. 2600/- per month.
viii. Compensatory Modified Field area Allowance available in specified areas
of Punjab, Rajasthan, Haryana, U.P., J&K, H.P. & North East (for specific
details about the areas eligible for the allowance, please refer to the
section 10(14) if I T Rules 1962):- Rs. 1000/- per month
ix. Counter Insurgency Allowance to members of Armed Forces:- Rs. 3900/-
Per month
x. Transport Allowance granted to an employee to meet his expenditure for
the purpose of commuting between the place of residence and place of
duty:- Rs. 800/- per month
xi. Transport allowance granted to physically disabled (blind or
orthopaedically handicapped with disability of lower extremities)
employee for the purpose of commuting between place of duty and
residence:- Rs. 1600/- per month.
xii. Underground Allowance granted to an employee working in under ground
coal mines:- Rs. 800/- per month.
xiii. Special Allowance in the nature of High Altitude Allowance granted to
member of the armed forces:- Rs. 1060 p.m. (for altitude of 9000-15000
ft.)Rs. 1600/- p.m. (for altitudes above 15000 feet.)
xiv. Special allowance granted to members of armed forces in the Highly
Active Field Area Allowance:- Rs. 4200/- p.m.
xv. Special allowance granted to members of armed forces in the nature of
island duty allowance: - Rs. 3,250/- in Andaman & Nicobar and
Lakshadweep Group of Islands.