Uniform Exemption

In case of Office Wear Reimbursement is exempted from Tax and the items under this head are as follows i) Attire ii) Ties iii) Shoes iv)Socks v) Tailoring Charges. For more clarity pl. go through above : Section 10(14)(i) of the Act allows an exemption in respect of any special benefits or allowances granted to meet expenses wholly, necessarily and exclusively incurred in the performance of the duties of an office or employment of profit as may be prescribed to the extent to which such expenses are actually incurred for that purpose. Rule 2BB(1) prescribes the following allowances: (a) any allowance granted to meet the cost of travel on tour or on transfer; (b) any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty; (c) any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit: Provided that free conveyance is not provided by the employer; (d) any allowance granted to meet the expenditure incurred on a helper where such helper is engaged for the performance of the duties of an office or employment of profit; (e) any allowance granted for encouraging the academic, research and training pursuits in educational and research institutions; (f) any allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform for wear during the performance of the duties of an office or employment of profit. It can, therefore, be seen that under clause (c) allowance given for conveyance will be exempt provided free conveyance is not provided to the employee, under clause (f) uniform allowance would be exempt while the allowance for professional development will not be eligible for any exemption. In any case it must be noted that even the conveyance and uniform allowance will be exempt only to the extent to what is actually spent.

Thanx Mr Prakash for the valuable information.

what this gratiuty ceiling ie3.5lackh is all about?can we pay gratutiye above this celing? imean if someone ` last drawn basic basic is 80000 and has worked for 10 year then what will be his gratuity will it be 461538 or 3.5 lack as it is maxceiling plz advice

You can pay the gratuity as per the calculation. Exemption from Inceom tax is allowed only up to 3.5 lacs regards Mahendra