Under Indian Income Tax Act, allowances which are non-taxable for the individual assessee are:

(A) Sumptuary allowances.

(B) Compensatory allowance paid to judges.

(C) Overtime allowance.

(D) Allowances paid to Govt. employees posted abroad.

(E) Non-practicing allowance.

Choose the most appropriate answer from the options given below:

The correct answer is (A), (B), (D) only

Key Points

Sumptuary allowance given to High Court Judges under section 22C of the High Court Judges Act, 1954 is not chargeable to tax.

Compensatory allowance received by a Judge under Article 222(2) of the Constitution is fully exempt.

Overtime Allowance - Employees who work beyond their regular shifts may receive an overtime payment from their employers. This is referred to as overtime and any compensation received is fully taxable.

Any allowance or perquisite paid or allowed by Government to its employees posted outside India is fully exempt.

Non-Practicing Allowance is a special kind of allowance payable to Doctors occupying the posts of Medical and Veterinary Services and is fully taxable.