Allowances Exempt for Certain Categories of Persons for Calculating Salary Income

Salaries, Tax Ready Reckoner

Certain professionals and government employees receive special allowances that are fully or partially exempt from tax under specific sections of the Income Tax Act. Here’s a detailed breakdown:

Table of Contents

1. Government & Défense Personnel

(A) Armed Forces Allowances (Fully Exempt)

ALLOWANCE	EXEMPTION	CONDITIONS
Border Area Allowance	Full exemption	Posted in specified border areas
High Altitude Allowance	₹3,000-25,000/month	Based on altitude
Siachen Allowance	₹42,500/month	For Siachen Glacier postings
Counter-Insurgency Allowance	₹16,900/month	For active combat zones

(B) Judges & Constitutional Officers

Sumptuary Allowance(SC/HC Judges) – Fully exempt
Official Residence Allowance– Exempt if used for official residence

2. United Nations & International Organizations

Salaries & Allowancesof Indian officials working with UN/IMF/WB – Fully exempt under Section 10(18)

Researchers & Academics

ALLOWANCE	EXEMPTION LIMIT	CONDITIONS
Research Grant	Full amount	Must be spent on approved research
Academic Allowance	₹2,000/month	For university professors

4. Members of Parliament/State Legislature

Constituency Allowance– ₹45,000/month exempt
Office Expense Allowance– ₹15,000/month exempt

5. Special Cases

CATEGORY	ALLOWANCE	EXEMPTION
Railway Employees	Night Duty Allowance	₹1,800/month
Doctors	Rural Area Allowance	₹10,000/month
Diplomats	Foreign Allowance	Full exemption