Professional Pursuit Allowance: Exemption Limit & Tax Benefits

Today’s competitive work scenario calls for continuous skill upgradation and professional development for a successful career. Considering this fact, the government has launched the Professional Pursuit Allowance (PPA). This allowance will support the employees in developing their skills without bearing any additional financial burden. 

This allowance encourages employees to upskill themselves and offers certain tax benefits. Keep reading to learn about the diverse aspects of the professional pursuit allowance, its meaning, tax benefits, and exemption limits!

What is Professional Pursuit Allowance?

Employers provide professional pursuit allowance to their employees to encourage the development of knowledge, skills, and qualifications for professional development. As it helps develop your professional skills and qualifications, you can also address it as a professional development allowance. 

With this financial assistance, employees can attend seminars, workshops, and training programs to boost their professional skills while continuing the job. Besides contributing to the employee’s career growth, this allowance also ensures a better, skilled, and competent workforce for the organisation. 

Professional Pursuit Allowance Bill

The professional pursuit allowance bill comes under section 10(14) of the Income Tax Act of 1961. Employees pursuing professional courses to upgrade their skills can avail of this allowance to meet the expenses of such courses. You need to provide the details of expenses incurred in your training program to the organisation in your work. It will help you receive a professional pursuit allowance as a part of your salary. 

Professional Pursuit Allowance Reimbursement 

You can reimburse professional pursuit allowance under the following conditions:

• You need to incur the expenses for which the professional pursuit allowance is granted. 
• Professional pursuit allowance must be utilised for the purpose your employer has granted it. 
• If the total allowance is not spent, you must return it to the employer.
• You can claim the excess amount as a deduction from your taxable monthly income if the allowance has not been granted for a specific period. You can also claim this deduction if you have not spent the entire sanctioned amount. 

Professional Pursuit Allowance Section 

As per the Income Tax Act of 1961, section 10(14), rule 2BB discusses the taxation of professional pursuit allowance. According to this clause, the allowance an employee receives to cover the expenses of training or education for the cause of his employment is eligible for tax exemption. Make sure you provide the required professional pursuit allowance proof to the tax authorities for a seamless exemption procedure.

What is the Limit of Professional Development Allowance?

As per section 10(14) of the Income Tax Act, employees receive certain exemptions on the professional pursuit allowance. You can claim a professional pursuit allowance deduction against the expenses incurred on your professional development. There is no limit prescribed under the Act. Hence, any allowance granted for encouraging academic, research and training pursuits in educational and research institutions is exempt.

Final Word

A professional pursuit allowance is a much-needed benefit that assists employees financially in pursuing their professional development. It helps employees in personal and professional growth while managing their finances efficiently through tax benefits. 

However, you need to stay updated with the latest tax regulations to avail of this allowance. This will help ensure compliance and enhance your benefits. You can consult financial experts for better guidance as per your employment role and job details.