Books and Periodical Allowance - What is it, Exemption limit, Income tax, & Deduction

In today's fast-evolving corporate space, books and periodicals are essential for employees to stay updated on news, changes, and policies. Not only that, books and periodicals are interactive and engaging and bring in a sense of relaxation after a long day at work.

Most companies include book and periodical allowances in the salary package to ensure employee progress and interest. Since book and periodical allowance is part of your salary, you may have questions regarding the exemption limits, formats and deductions.

It is designed to encourage continuous learning and knowledge acquisition among employees, both professionally and personally. Employers add this benefit to employees' salaries.

Keep reading to learn about the book and periodical allowance exemption limit, eligibility, tax benefits, and a lot more.

What is Book and Periodical Allowance?

Salaried employees are also provided reimbursement for books, newspapers, journals and periodicals they purchase. Under this allowance, employees get reimbursement for the expenses incurred in purchasing books, magazines, journals, and newspapers. According to section 10(14) of the IT Act 1961, books and periodicals allowance are completely tax exempt. 

Employees are entitled to the allowance only if they claim it within a year of purchase. You must keep a detailed record of your expenses, including original invoices and receipts, to claim the disbursement. 

Usually, it is clubbed along with other allowances under special allowance, but some organisations offer books and periodicals allowance separately in the pay slip. The allowance amount varies from one organisation to another, depending on their budget and employee status. 

Benefits of Books and Periodical Allowance

• Professional Development: Helps employees stay informed about industry trends and advancements.
• Knowledge Enhancement: Encourages continuous learning and self-improvement.
• Work Efficiency: Improves job performance by providing access to relevant resources.
• Language Development : Reading books, particularly diverse genres, improves vocabulary, comprehension, and writing skill
• Stress Reduction: Reading can be a relaxing and engaging activity, helping to reduce stress and promote mental well-being.

Types of Expenses Covered under Book and Periodicals Allowance

The books and periodicals allowance encompasses a wide range of expenses. You can claim disbursement for purchasing the following items:

• Purchase of books, including technical manuals, textbooks, and reference books. 
• Subscription fees for journals, magazines, and newspapers
• Membership fee for relevant publications
• Subscriptions for online e-books. 
• Covering the cost of membership fees associated with publications

Books and Periodicals Allowance Eligibility Criteria

To be eligible for books and periodicals allowance, the following criteria are applicable:

• You must be a full-time permanent employee to be eligible for books and periodicals allowance
• Completion of a minimum of one year of employment with the specific company
• You should submit original bills and purchase receipts 
• Show the transactions via statements of bank or credit card related to the purchase of books and periodicals.
• Books should be directly related to your profession or job role
• You must not purchase books and periodicals for resale purposes. 

Books and Periodicals Allowance Exemption Limit

Now that you know what a book and periodical allowance is, you must also learn about the book and periodical allowance exemption limit. According to section 10(14) of the IT Act 1961 of the Income Tax Act, Books and Periodicals allowance falls under the non-taxable allowance. It is a fully tax-free allowance on actuals. Thus, an employee can claim the disbursement within a financial year as an exemption while filing their income tax returns.

Books and Periodicals Allowance Exemption Section  

Section 10(14) of the Income Tax Act 1961 deals with books and periodicals, giving you a fully exempt allowance from taxes. This exemption from tax on actual expenses means that you don't have to pay certain taxes, such as sales tax or value-added tax, when purchasing these items. The exemption is directly proportional to the exact amount you have used in buying books and periodicals.

Books and Periodicals Allowance under the Income Tax Section

Generally, the eligible allowances for tax exemptions are listed under section 10(14) of the IT Act 1961. According to that, the books and periodicals allowance exemption limit falls under Section 10 of the Income Tax Act. As per this income tax section, employees can enjoy fully tax-free reimbursement by submitting original bills and receipts. 

Books and Periodicals Allowance Bill Format

Employees must follow a bill format containing all the necessary information to claim the disbursement. Refer to the bill format given below to claim disbursement: 

Books and Periodicals Allowance Receipt

You can claim books and periodicals allowance via reimbursement. You have to claim within one year of purchase with bills and transactions made. Employees can submit the original purchase receipt containing brand details, quantity of books, date of purchase, and total expense. 

After verification of the purchase receipts, the employer disburses either the total bill amount or the amount included in the salary package. Employees must submit the receipts within one year from the purchase date, or they cannot claim the disbursement. 

Books and Periodicals Allowance in ITR

While filing your Income Tax Returns, you can claim the books and periodicals allowance to reduce tax liability, as the entire disbursement amount is exempted. It is a tax-free reimbursement as per Section 10(14) of the Income Tax Act. 

Books and Periodicals Allowance Deduction

Employees can claim reimbursement for the expenses incurred in newspapers, journals, magazines, books, etc. Under the books and periodicals allowance, the reimbursement is tax-free. However, the deduction amount of reimbursement depends on two factors:

• The actual purchase bill amount, or
• The fixed amount for books and periodicals allowance amount in the salary package

Whichever is lower is reimbursed by the company.  

Conclusion

Books and periodical allowances are designed to keep employees abreast of the latest developments in relevant fields. They are also a fantastic way to save on taxation as they are fully tax-exempt allowances. However, keep track of the records and submit your bills on time to claim the reimbursement.