As on date, Income Tax Act does not provide any exemption on any element on reimbursement basis, except Rs.100 per month per child for Children's education. So as of now, whether voucher is produced or not, tax is payable in practically all cases.
However, as per existing provisions of the IT Act, those opting for Transport Subsidy (as against Conveyance Allowance) would be eligible for exemption of Rs.800 per month i.e. Rs.9600 per year from their total taxable income without any need for production of any voucher.
Meal Voucher or Meal Coupons are provided by the employer to the employee for procurement of Food articles from accredited merchant establishments. The same is exempt upto a certain limit beyond which the value of the coupons so provided gets added to the income of the employee as perquisite. Detailed circular would be issued soon in this regard.
The IT Act gets revised on annual basis. Generally as part of the budget exercise, announced during the last week of February. Similarly, the circular also provides for furnishing of declaration on annual basis, by 15th March. So, based on the circumstances prevalent at that point of time, one should apply their best judgement.
Income Tax is guided by two documents rather than one primary document - The Income tax Act and The Income Tax Rules. While the Act defines the basic structure, the Rules define the details.
Any amount which is paid to the employee in the form of Cash Benefit comes in the scope of Allowances whereas any element given in the form of non-cash/concessional benefit comes in the scope of Perquisite.
The exemption of Allowances is guided by Sec 10(14) of the IT Act and Rule 2BB of the IT Rules. Any Allowance which is not covered in Rule 2BB is fully taxable in the hand of the employee.
The valuation of Perquisites is guided by Section 17(2) of the IT Act and Rules 3 and 3A of the IT Rules. The total value of perquisite so arrived gets added to the income of the employee.
The details are available in the official website of the Income Tax Dept.
IT Dept WebsiteThe major exemption for allowances are as follows,
1.
Any Special Compensatory Allowance in the nature of Special Compensatory (Hilly Areas) Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow Bound Area Allowance or Avalanche AllowanceRs. 800 per month for the following areas
(a)Manipur Mollan/RH-2365
(b) Arunachal Pradesh [(i) Kameng; (ii) North Eastern Arunachal Pradesh where heights are 9,000 ft. and above; (iii)Areas east or west of Siang and Subansiri sectors]
(c) Sikkim [(i) Area North-NE-East of line Chhaten LR 0105, Launchung LR 1902, pt. 4326 LW 1790, pt. 4349 LW 1479, pt. 3601 LW 1471 to mile 13 LW 1367 to Berluk LW 2253; (ii) All other areas at 9,000 ft. and above.]
(d) Uttar Pradesh [ Areas of Harsil, Mana and Malari Sub-divisions and other areas of heights at 9,000 ft. and above]
(e) Himachal Pradesh [(i)All areas at 9,000 ft. and above ahead of line joining Puhkajakunzomla towards the bower; (ii) Area ahead of line joining Karchham and Shigrila towards the bower; (iii) All areas in Kalpa, Spiti, Lahul and Tisa]
(f) Jammu and Kashmir [(i) All areas from NR 396950 to NR 350850, NR 370790, NR 311776 North of Shaikhra Village, North of Pindi Village to NR 240800; (ii) Areas of Doda, Sank and other posts located in areas at a height of 9,000 ft. and above; (iii) North of line Kud-Dudu and Basttgarh, Bilwar, Batote and Patnitop; (iv) All areas ahead of Zojila served by Road Srinagar-Zojila-Leh in Leh District; (v) Gulmarg - All areas forward of line joining Anita Linyan 3309 - Kaunrali – 2407; (vi) Uri South - All areas forward of Kaunrali - Kandi 1810 Kustam 1505 - Sebasantra 1006 Changez 0507 - Jak 19904 Keekar 9704 Jamun 9607 Neeta 9508; (vii) BAAZ Kaiyan Bowl - All areas forward of Dulurja 9712-BAAZ 0317 - Shamsher 0416 including New Shamsher 0615 - Zorawar 1017 - Malaugan Base 1027 - Radha 0836 to Nastachun Pass 9847; (viii) Tangdhar - All areas west of Nastachun Pass Tangdhar Bowl and on Shamshabari Range and forward of it; (ix) Karan and Machhal sub-sectors - All areas along the line Pharkiangali 0869 to Z Gali 4376 and forward of Shamshabari Range; (x) Panzgam, Trehgam and Drugmul]
Rs. 7,000 per month for Siachen area of Jammu and Kashmir
Rs. 300 per month for all places located at a height of 1,000 metres or more above the sea level, other than places specified above.
2.
Any Special Compensatory Allowance in the nature of Border Area Allowance, Remote Locality Allowance or Difficult Area Allowance or Disturbed Area AllowanceRs. 1,300 per month
(a) Little Andaman, Nicobar and Narcondum Islands;
(b) North and Middle Andamans;
(c) Throughout Lakshadweep and Minicoy Islands;
(d) All places on or north of the following demarcation line [Point 14600 (2881) to Sala MS 2686-Matau MS 6777 - Sakong MT 1379-Bamong-Khonawa MO 2803 - Nyapin MO 7525 - River Khru to its junction with the river Kamla MP - 2226 - Taliha - Yapuik MK 7410 - Gshong MK 9749 - Yinki Yong NF 4324-Damoroh MF 6208 - Ahinkolin NF 8811 - Kronli MG 2407 - Hanli NM 4096 -Gurongon NM 4592-Loon NM 7579 - Mayuliang NM 0169-Chawah NM 9943 - Kamphu NM 1125 - Point 6490 (NM 1493) Vijayanagar NSA 486]
(e)Following areas in Himachal Pradesh [(i) Pangi Tehsil of Chamba District; (ii) Following Panchayats and villages of Bharmour Tehsil of Chamba District :(A) Panchayat : Badgaun, Bajol, Deol Kugti Nayagam and Tundah. (B) Villages : Ghatu of Gram Panchayat Jagat Kanarsi of Gram Panchayat, Cauhata. (iii) Lahaul and Spiti District; (iv) Kinnaur district: (A) Asrang, Chitkul and Hango Kuno Charang Panchayats; (B) 15/20 Area comprising the Gram Panchayats of Chhota Khamba, Nathpa and Rupi; (C) Pooh Sub-Division excluding the Panchayat Areas specified above. (v) 15/20 Area of Rampur Tehsil comprising of Panchayats of Koot, Labana-Sadana, Sarpara and Chandi Branda of Shimla District. (vi) 15/20 Area of Nirmand Tehsil, comprising the Gram Panchayats of Kharga, Kushwar and Sarga of Kullu District. ]
(f) Chimptuipui District of Mizoram and areas beyond 25 km. from Lunglei town in Lunglei District of Mizoram.
(g) Following areas in Jammu and Kashmir: [(i) Niabat Bani, Lohi, Malhar and Macchodi of Kathua District; (ii) Dudu Basantgarh Lander Bhamag Illaqa, Thakrakote and Nagote of Udhampur District;(iii) All areas in Tehsil Mahore except those specified at III(f)(i) below in Udhampur District; (iv) Illaqas of Padder and Niabat Nowgaon in Kishtwar Tehsil of Doda District; (v) Leh District; (vi) Entire Gurez - Niabat, Tangdhar Sub-Division and Keran Illaqa of Baramulla District]
(h) Following areas of Uttar Pradesh : [(i) Chamoli District; (ii) Pithoragarh District; (iii) Uttarkashi District]
(i) Throughout Sikkim State.
Rs. 1,100 per month for Installations in the Continental Shelf of India and the Exclusive Economic Zone of India.
Rs. 1,050 per month for
(a) Throughout Arunachal Pradesh other than areas covered above
(b) Throughout Nagaland State.
(c) South Andaman (including Port Blair).
(d) Throughout Lunglei District (excluding areas beyond 25 km. from Lunglei town) of Mizoram.
(e) Dharmanagar, Kailasahar, Amarpur and Khowai in Tripura.
(f) Following areas in Jammu and Kashmir : [(i) Areas up to Goel from Kamban side and areas upto Arnas from Keasi side in Tehsil Mahore of Udhampur District; (ii) Matchill in Baramulla District]
(g) Following areas in Himachal Pradesh : [(i) Bharmour Tehsil, excluding Panchayats and villages covered by those specified above of Chamba District; (ii) Chhota Bhangal and Bara Bhangal area of Kangra District; (iii) Kinnaur District other than areas specified above; (iv) Dodra - Kawar Tehsil, Gram Panchayats of Darkali in Rampur, Kashapath Tehsil and Munish, Ghori Chaibis of Pargana Sarahan of Shimla District.
Rs. 750 per month for
(a) Throughout Aizawal District of Mizoram;
(b) Throughout Tripura except areas those specified above
(c) Throughout Manipur;
(d) Following areas of Himachal Pradesh : [(i) Jhandru Panchayat in Bhatiyat Tehsil, Churah Tehsil, Dalhousie Town (including Banikhet proper) of Chamba District; (ii) Cuter Seraj (excluding Village of Jakat-Khana and Burow in Nirmand Tehsil of Kullu District; (iii) Following areas of Mandi District : (A) Chhuhar Valley (Joginder-nagar Tehsil); (B) Bagra, Chhatri, Chhotdhar, Garagushain, Gatoo, Gharyas, Janjehli, Jaryar, Johar Kalhani Kalwan, Kholanal, Loth, Silibagi, Somachan, Thachdhar, Tachi and Thana Panchayats of Thunag Tehsil; (C) Binga, Kamlah, Saklana, Tanyar and Tarakholah, Panchayats of Dharampur Block; (D) Balidhar, Bagra, Gopalpur, Khajol, Mahog, Mehudi, Manj, Pekhi, Sainj, Sarahan and Teban, Panchayats of Karsog Tehsil; (E) Bohi, Batwara, Dhanyara, Paura-Kothi, Seri and Shoja, Panchayats of Sundernagar Tehsil. (iv) Following areas and offices of Kangra District : (A) Dharamshala town and Women’s ITI; Dari, Mechanical Workshop, Ramnagar; Child Welfare and Town Country Planning Offices, Sakoh; CRSF Office at lower Sakoh; Kangra Milk Supply Scheme, Shamnagar; Tea Factory, Dari; Forest Corporation Office, Sham-nagar; Tea Factory, Dari; Settlement Office, Shamnagar and Binwa Project, Sham-nagar. Offices located outside the Municipal limit of Dharamshala town but included in Dharamshala town for purposes of eligibility to special Compensatory (Remote Locality) Allowance; (B) Palampur town, including HPKVV Campus at Palampur and H.P. Krishi Vishvavidyalaya Campus; Cattle Development Office/ Jersy Farm, Banuri; Sericulture Office/Indo-German Agriculture Workshop/HPPWD Division, Bundla; Electrical Sub-Division, Lohna; D.P.O. Corporation, Bundla and Electrical HPSEE Division, Ghuggar offices located outside the Municipal limits of Palampur town but included in Palampur town for the purpose of above allowance; (v) Chopal Tehsil; Ghoris, Panjgaon, Patsnu, Naubis and Teen Koti of Pargana Sarahan; Deothi Gram Panchayat of Taklesh Area; Pargana Barabis; Kasba Rampur and Ghori Nog of Pargana Rampur of Rampur Tehsil of Shimla District and Shimla Town and its suburbs (Dhalli, Jatog, Kasumpti, Mashobra, Taradevi and Tutu); (vi) Panchayats of Bani, Bakhali (Pachhad Tehsil), Bharog Bhe-neri (Paonata Tehsil), Birla (Nahan Tehsil), Dibber (Pachhad Tehsil) of Thanan Kasoga (Nahan Tehsil) in Sirmour District and Transgiri Tract of Sirmour District; (vii) Mangal Panchayat of Solan District]
(e) Following areas in Jammu and Kashmir : [(i) Areas in Poonch and Rajouri Districts excluding the towns of Poonch and Rajouri and Sunderbani and other Urban areas in the two districts]
(f) Following areas in Jammu and Kashmir : [Areas not included above, but which are within a distance of 8 km. from the line of actual control or at places which may be declared as qualifying for Border Allowance from time to time by the State Government for their own staff.
Rs. 300 per month for Jog Falls in Shimoga District in Karnataka.
Rs. 200 per month for
(a) Throughout the State of Himachal Pradesh other than areas covered above
(b) Throughout the State of Assam and Meghalaya
3.
Special Compensatory (Tribal Areas/Schedule Areas/Agency Areas) AllowanceRs. 200 per month
(a) Madhya Pradesh
(b) Tamil Nadu
(c) Uttar Pradesh
(d) Karnataka
(e) Tripura
(f) Assam
(g) West Bengal
(h) Bihar
(i) Orissa
4.
Children Education AllowanceRs. 100 per month per child up to a maximum of two children.
5.
Any allowance granted to an employee to meet the hostel expenditure on his childRs. 300 per month per child up to a maximum of two children.
6.
Transport allowance granted to an employee [other than an employee referred to in serial number 7 below] to meet his expenditure for the purpose of commuting between the place of his residence and the place of his dutyRs. 800 per month
7.
Transport allowance granted to an employee, who is blind or orthopaedically handicapped with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his dutyRs. 1,600 per month
by Admin Mon Oct 04, 2010 4:26 pm
