Thursday, December 17, 2009

Railway board,
Rail Bhavan,
New Delhi.

Respected Sir,

Sub:-Enhancing the exemption limit of Running allowance from Income Tax-reg:-

70% of Running Allowance received by Running Staff of Indian Railways up to the maximum of Rs. 6000/- per month is exempted from Income Tax. This is done vide sec (14)(ii) read with rule 2BB(2) of Income Tax rules to exempt 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 of such transport from one place to another place; provided such employee is not in receipt of daily allowance. The maximum limit of Rs. 6000/-per month is fixed as per Income Tax (third amendment) Rules, 2000 with effect from 01.08.1997, i.e. from the date of revision of running allowance on implementation of 5th CPC.

Consequent upon the implementation of 6th CPC and enhancing daily allowance by 3.8 times w.e.f. 01.09.2008, the maximum limit of Running allowance exempted from Income Tax also requires enhancement from the present level of Rs.6000 to the tune of 3.8 times.

This Association requests your august authority to take up the matter at the appropriate level so as to enhance the exemption limit of running allowance from Income Tax to3.8 times. This matter requires immediate attention as the calculation for deduction towards Income Tax from the salary of the employees for the Financial Year 2009-2010 are going to be finalized in the coming months.

Thanking you,
Yours faithfully,
New Delhi, Secretary General/AILRSA


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