Tax Exemption Limits: The tax exemption limit for allowances and reimbursements given to employees in India depends on various factors such as the nature of the allowance or reimbursement, the position of the employee and the amount of payment etc.
Tax Exemption Limits: In India, the tax exemption limit for allowances and reimbursements paid to employees depends on various factors such as the nature of the allowance or reimbursement, the position of the employee and the amount paid. Amount.
Here is the information about the tax exemption limit for allowances and reimbursements-
House Rent Allowance (HRA)
HRA is a general allowance provided by employers to their employees to meet the cost of rented accommodation. The tax exemption limit for HRA is the lower of the following three amounts:
Actual HRA received from employer
Rent paid 10% of basic pay
50% of basic pay (for employees in metro cities) or 40% of basic pay (for employees in non-metro cities)
Leave Travel Allowance (LTA)
LTA is an allowance given by the employers to the employees for traveling expenses during their leave. The limit of tax exemption for LTA is the actual amount spent on travel, subject to a maximum of twice the amount of LTA availed by the employee. Exemption is available only for two journeys in a block of four years.
Medical reimbursement
Medical reimbursement is provided by the employers to the employees to cover their medical expenses. The tax exemption limit for medical reimbursement is Rs. 15,000 per annum.
Transport Allowance (TA)
Transport allowance is provided by the employer to the employees to cover their transportation expenses. The tax exemption limit for transport allowance is Rs. 1,600 per month.
Children Education Allowance (CEA)
CEA is provided by the employer to the employees to cover the expenses of their children’s education. The tax exemption limit for CEA is Rs. 100 per month per child, subject to a maximum of two children.
Uniform allowance
Uniform allowance is provided by the employers to the employees to cover the cost of their uniform. The tax exemption limit for uniform allowance is Rs. 5,000 per annum.
Meal Allowance
Meal allowance is provided by the employers to the employees to cover their meal expenses. The tax exemption limit for food allowance is maximum Rs 1,200 per month. 50 per meal subject to Rs.
Gift and entertainment allowance
Gifts and Entertainment Allowance is provided by the employers to the employees to cover their expenses for gifts and entertainment purposes. The tax exemption limit for gift and entertainment allowance is Rs 5,000 per annum.
It may be noted that these tax exemption limits are subject to change from time to time depending on the policies and regulations of the government. Employers must ensure that they comply with the latest tax laws and regulations while providing allowances and reimbursements to their employees.
