Summary: Armed forces personnel are entitled to various allowances for working in challenging and high-risk conditions, which are partially or fully exempt from tax under Section 10(14) of the Income Tax Act. These allowances, fixed regardless of the actual expenses incurred, include compensations for hilly areas, remote locations, and difficult terrains. Specific allowances like the High Altitude Allowance range from Rs. 1,060 to Rs. 1,600 per month, depending on the altitude, while the Island Duty Allowance, applicable in places like Andaman and Nicobar Islands, offers up to Rs. 3,250 per month. Other exemptions include the Special Compensatory Allowance (up to Rs. 7,000), Border Area Allowance (up to Rs. 1,300), and Counter Insurgency Allowance (up to Rs. 3,900), among others. These exemptions provide essential financial relief to armed forces personnel stationed in hazardous and remote locations, ensuring they are compensated for the risks and difficulties of their service. The exemption limits and eligibility depend on the location and specific conditions of deployment.
Armed Forces – Benefits available
Personnel of the Armed forces is allowed various allowances for working in risky, uncongenial, and difficult situations. These allowances are generally fixed and don’t depend on the actual expenditure incurred by the personnel. Get the details of all these allowance under this document
Allowances available to armed forces [Section 10(14) r.w.r. 2BB]
Personnel of the Armed forces is allowed various allowances for working in risky, uncongenial, and difficult situations. These allowances are generally fixed and don’t depend on the actual expenditure incurred by the personnel. The Income-tax Act allows a full exemption for these allowances up to a certain limit, which is explained below.
| S. No. | Section | Particulars | Exemption limit | Exemption available to |
| 1. | Section 10(14) | Special Compensatory Allowance (Hilly Areas) (Subject to certain conditions and locations) | Varies from Rs. 300 per month to Rs. 7,000 per month. | Individual – Salaried employee |
| 2. | Section 10(14) | Border Area Allowance, or Remote Locality Allowance, or Disturbed Area Allowance, or Difficult Area Allowance (Subject to certain conditions and locations) | Varies from Rs. 200 per month to Rs. 1,300 per month. | Individual – Salaried employee |
| 3. | Section 10(14) | Tribal Area or Special Compensatory or Scheduled Area or Agency Area Allowance (Subject to certain locations) | Up to Rs. 200 per month | Individual – Salaried employee |
| 4. | Section 10(14) | Compensatory Field Area Allowance. (Subject to certain conditions and locations) | Up to Rs. 2,600 per month | Individual – Salaried employee |
| 5. | Section 10(14) | Compensatory Modified Field Area Allowance. (Subject to certain conditions and locations) | Up to Rs. 1,000 per month | Individual – Salaried employee |
| 6. | Section 10(14) | Counter Insurgency Allowance granted to the members of armed forces operating in areas away from their permanent locations. | Up to Rs. 3,900 per month | Individual – Members of the Armed Forces |
| 7. | Section 10(14) | Underground Allowance granted to employees working in uncongenial, unnatural climates in underground mines | Up to Rs. 800 per month | Individual – Salaried employee |
| 8. | Section 10(14) | High Altitude Allowance granted to the armed forces operating in high altitude areas | a) Up to Rs. 1,060 per month (for an altitude of 9,000 to 15,000 feet) b) Up to Rs. 1,600 per month (for an altitude above 15,000 feet) |
Individual – Members of the Armed Forces |
| 9. | Section 10(14) | Special Compensatory Highly Active Field Area Allowance granted to members of the armed forces | Up to Rs. 4,200 per month | Individual – Members of the Armed Forces |
| 10. | Section 10(14) | Island Duty Allowance granted to members of the armed forces in Andaman and Nicobar and Lakshadweep group of Island | Up to Rs. 3,250 per month | Individual – Members of the Armed Forces |
[As amended by Finance Act, 2024]
