Allowance is a fixed/flat amount given to the employee

Some of the allowance are fully exempt. However some are exempt up to some limits. However all other remaining are fully taxable.

Types of Allowances

  1. Fully Exempt Allowances for All
  2. Fully Exempt Allowances for Certain People
  3. Allowance Exempt upto Some Limit
  4. Taxable Allowances    

We have to remember the first 3 kinds of allowances.

All other alllowance except the above 3 are fully taxable allowances

  Lets study these in detail

  1. Income Tax
  2. Income from Salaries
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Davneet Singh
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