Uniform Allowance - Exemption Limit, Rules and Calculation

In certain Government Offices, wearing uniforms is mandatory for employees. They usually receive a uniform allowance as a part of their salary to purchase and maintain their official attire. This type of income is not taxable, enabling you to apply for a deduction while filing your returns.

Therefore, if you receive a uniform allowance, keep reading this article. We will talk about the uniform allowance exemption limit, its calculation method and a lot more. 

Uniform Allowance Exemption

As per Section 10 (14) (ii) of the Income Tax Act, the total expenditure incurred by an employee for maintaining his/her official uniform is exempt from taxation. 

According to government rules, uniform allowance falls under the special allowance. It is given to employees for either carrying out their official duties or meeting personal expenses during their employment tenure. Thus, this type of income is exempt from taxation. 

Uniform Allowance Exemption Under New Tax Regime

According to the latest reports by the Central Board of Direct Taxes (CBDT), only a certain number of special allowances are applicable for deduction under the new tax regime. They include the following:

• Expenditure for official tours/transfers.
• Allowances to employees with specific disabilities for commuting to/from the office.
• Conveyance allowance for employees while performing their official duties. 

However, the new tax regime does not allow the following special allowances to be applicable for exemption:

• Uniform allowance
• Academic Allowance
• Helper allowance
• Hostel allowance
• Children education allowance

Thus, individuals desiring to claim uniform allowance exemption should consider filing their taxes under the old regime. 

Calculation of Uniform Allowance

While filing income tax returns, government employees can opt for uniform allowance tax exemption on the total amount of money they received or spent within a financial year for purchasing or maintaining their uniforms, whichever is lower. Moreover, they need to produce the actual bill while filing the return to avail the benefit. 

The uniform allowance typically covers the cost of:

• Purchasing uniforms
• Tailoring or alteration expenses
• Maintenance and laundry of uniforms
• Accessories required to be worn as part of the uniform

Final Word 

In a nutshell, uniform allowance exemption only applies to government employees who are required to maintain a specific dress code while performing their official duties. They can claim a deduction on the total amount received or spent in this regard. However, they need to file their returns under the old regime to claim this benefit.