Income Tax – Exempted Allowance – Rules Amended
AS per Section 10(14) of the Income Tax Act, certain special allowances are not included in computing the total income. Rule 2BB prescribes the allowances which are exempted.
As per Sl. No. 4 of the list, "Any allowance granted to an employee working in any transport system to meet his personal expenditure during his duty performed in the course of running such transport from one place to another place, provided that such employee is not in receipt of daily allowance", to the extent of 70 percent of the allowance up to a maximum of Rs. 6000 per month, is exempted.
Now this maximum limit of Rs. 6000 is enhanced to Rs. 10,000 retrospectively with effect from 1st day of September, 2008.
CBDT Notification No. 85/2010 [F. NO. 149/45/2010-SO (TPL)], DATED 22-11-2010