Allowance definition: the act of allowing.. See examples of ALLOWANCE used in a sentence. Allowances is a term that helps employees to manage expenses like travelling, cost of living, housing and more. An employee must have come across with words like Dearness Allowance, House Rent Allowance, Conveyance Allowance, Leave Travel Allowance in their salary slips. Having a comprehensive understanding of each allowance will eventually help employees plan their finances better and make the most of their earnings. The blog will discuss allowance meaning, its types, tax implications, and ... An allowance is a fixed amount of money typically provided by employers to employees. It is a compensation package, added to the basic salary, covering specific expenses. The amount of allowances is variable, mainly depending on the employer’s policies and the nature of the job. Allowances are the financial benefits that are given to the employees by the employers over their regular salary. While some allowances are taxable under the head salaries, some are partially taxable or fully non-taxable. In general terms, any monetary benefit offered to employees for meeting expenditures over and above the basic salary is called Salary Allowances. According to the Income Tax Act, allowances are added to the salary of an individual and taxed under the head income from ...
