Tax free allowances to employees: Special compensatory allowance

What are the qualifying criteria for providing staff with special compensatory allowance, in hilly areas- are there any pre-determined locations? How are these assessed?
Asked 11 months ago in Income Tax from Hyderabad, Telangana
Dear Sir,

Yes there are areas specified for giving allownace under special compensatory allowance.

Rs. 800 pm for various areas of north east, hilly areas if up, hp and j&k.

Rs. 7000 pm for Siachen area of j&k

RS. 300pm for all places at height of 1000mtr and above.

Please feel free to revert if you need any additional clarification on the above.

Thanks and Regards
CA Abhishek Dugar
Caabhishekdugar@gmail.com

Abhishek Dugar
CA, Mumbai
1241 Answers
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Dear Sir,

Yes, the areas are pre-determined. You need to check with the area where you are exactly posted or posting your employees.

The criteria is only for the deduction under the Income Tax Act, but there is no compulsion in providing the same.

Trust this clarifies your query. 

Please feel free to call/ get back in case of any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
1209 Answers
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Dear Sir,
Yo can refer the prescribed allowances, in rule 2BB(1) and (2) which you can find from IncometaxDepartment.com.
The list of areas has been prescribed there with  the requisite amount of Special compensatory allowance.

Thanks and Regards
Shiv Kumar Agarwal
CA, Delhi
205 Answers
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Yes areas are specifically mentioned to claim the dedcution and apart from that area the dedcution shall not be subject to Tax Free. One can refer Section 10 of Income Tax for details.
Vishrut Rajesh Shah
CA, Ahmedabad
624 Answers
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