Exempt the Island Special Duty allowance, NER Special Duty Allowance from the purview of income tax: Agenda Item 47th NC(JCM) Meeting

Staff Side stated that the Island Special Duty Allowance and Special Duty Allowance granted to employees in the North Eastern Region may be exempted from the purview of Income Tax.

Staff Side wanted the Government to appreciate that the NE special duty allowance and the Andaman Special duty allowances are in the nature of reimbursement of expenses and are clearly beyond the ambit of taxable income. They requested the Government to exempt these allowances from taxation considering the fact that the officials are required to incur additional expenditure when posted to these places and the quantum of allowance would not even meet the expenses in full.

Reply of the Official Side :

With a view to improving the equity of the tax system, it has been the policy of the government to provide tax benefit for personal expenses only by periodically reviewing exemption available to the entire community of individual taxpayers. The current policy is to withdraw the individual allowance and allow a general deduction which would be available to all taxpayers. A standard deduction upto Rs, 40,000 or the amount of salary received per annum, whichever is less, is allowed. In view of this, the demand of the Staff Side is not feasible.

This item may be treated as closed.

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Item No. 7/19/NC-47 – Exempt transport/running allowance from income-tax.