Non-Taxable Allowance – Meaning of Non-Taxable Allowance and Its Importance | HRMantra HR Software

Non-Taxable Allowance ?? Meaning of Non-Taxable Allowance and Its Importance | HRMantra HR Software

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Non-Taxable Allowance

Non-taxable allowance is the amount of money you give your employees along with their regular salary. This amount is provided by the employers to their employees in order to help them bear regular expenses related to the job, such as travel expenses, rent, and other similar costs incurred by the employee.

This means that, as the name says, this income is not taxable, so he doesn''t pay any taxes for this.

List of Non-Taxable Allowances in India

• HRA
• Rent of the employee except for the 10% of the basic salary they''re paid.
• 40% of the salary of the employees including basic salary with DA for all the non-metro cities.
• 50% of the salary (same, basic salary DA) for the employees in metro cities.
• Medical allowances: the employees don''t pay tax for up to 15000 INR annually.
• Special allowances: these allowances can cover personal expenses.
• Conveyance allowances: these allowances are tax-free for up to 1600 INR monthly.
• Allowances paid to the government employees.
• Allowances paid to UNO employees.
• Other tax-free allowances include academic allowance, daily allowance, helper allowance, and uniform allowance to employees.

Non-Taxable Allowances from the Employee Side

The non-taxable allowances paid to employees include uniform allowance, perquisites for the government employees or other allowances allowed for Indian citizens in other countries, benefits given to the UNO employees under section 002 of the United Nations, compensatory allowances which are given to judges under Article 222 of the constitution, sumptuary allowances for high court judges under section 22C, helper allowances, and any other free taxable allowances.

Non-Taxable Allowance in Salary

The non-taxable allowances in salary are usually for government employees, judges of Supreme Court and High Court, and employees of the UNO, United Nations Organization.

We have already discussed all of the above in the list of the non-taxable allowances given to employees.

The non-taxable housing allowance is, in effect, half the salary eligible for HRA tax exemption by an employee. But again, it is subject to a condition wherein it is to be applied if they are living in a metro city.

Some of the metropolitan cities in India include Delhi, Calcutta, Chennai, and Mumbai.

If an employee resides in a non-metro city, then they''re only eligible for HRA that can be worth 40% of their salary.

Which Allowances Are Non-Taxable

• Uniform allowance
• Perquisites for government employees or other allowances allowed for Indian citizens in other countries
• Benefits granted to UNO employees under section 002 of the United Nations, UN, Act
• Compensatory allowances to judges under Article 222(2) of the constitution
• Sumptuary allowances to high court judges under section 22C
• Helper allowances
• Any other free taxable allowances

Is Non-practicing Allowance Taxable

Non-practicing allowances are the benefits given to doctors working with health centres, railways, or any other department coming under the central, union, or state government.

No, is the answer to the question. All the non-practicing allowances paid to the salaried employees are taxable.

How Much Percentage of Transport Allowance Is Non-Taxable

If you go as low as 10K monthly, then fully exempt 70% of your transport allowances, they would mean they are non-taxable.

The benefit though is only given to employees who have to use transport to go from one place to another due to their official responsibilities. However, it''s important to note that they don''t get daily allowances.

Is It Necessary to Mention Non-Taxable Allowance in ITR

Yes, you need to mention the non-taxable allowance you have received within a financial year.

Non-Taxable Allowances Made Easy

Whether you are an employer or an employee it is equally important for both of you to understand this non-taxable allowance. These allowances are given to you along with your basic salary to make your lives easy.

Although rules differ for different types of employees serving in different departments, benefits are given to make your life easier depending on it; they differ in different sectors—public and private—and living in different types of cities, metro cities and non-metro cities.

You should have gained a certain grasp regarding this topic by going through this article. It shall help you out.

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