## Special Allowances — Section 10(14)
Section 10(14) splits into two sub-clauses: allowances for performance of duties [10(14)(i)] and allowances to meet personal expenses [10(14)(ii)].
### A. Performance-of-Duties Allowances — Section 10(14)(i)
Granted exclusively for official purposes; exempt to the extent actually spent for that purpose (Rule 2BB):
- Helper, Research, Uniform Allowance → Fully taxable under DTR; under OTR exempt to the extent spent on official purpose.
- Travelling, Daily, Conveyance Allowance → Exempt under BOTH regimes, to the extent spent for the official purpose.
### B. Personal-Expense Allowances — Section 10(14)(ii)
Granted to meet personal expenses; exemption is a flat amount (regardless of actual spend) and is available only under the Optional Tax Regime.
| # | Allowance | Exempt amount |
|---|---|---|
| 1 | Special Compensatory (Hilly Areas)/High-Altitude/Uncongenial Climate/Snow-Bound/Avalanche | ₹800 or ₹300 p.m. (location-based); ₹7,000 p.m. in Siachen (J&K) |
| 2 | Border area / remote locality / difficult area / disturbed area | ₹1,300 / 1,100 / 1,050 / 750 / 300 / 200 p.m. (location-based) |
| 3 | Tribal/Scheduled/Agency Areas (specified States) | ₹200 p.m. |
| 4 | Transport-sector employee (running allowance; not also getting daily allowance) | Lower of 70% of allowance or ₹10,000 p.m. |
| 5 | Children Education Allowance | ₹100 p.m. per child, max 2 children |
| 6 | Hostel expenditure allowance | ₹300 p.m. per child, max 2 children |
| 7 | Compensatory Field Area Allowance | ₹2,600 p.m. |
| 8 | Compensatory Modified Field Area Allowance | ₹1,000 p.m. |
| 9 | Counter-insurgency allowance (armed forces away from permanent location) | ₹3,900 p.m. |
| 10 | Underground Allowance (underground mines) | ₹800 p.m. |
| 11 | High-Altitude allowance (armed forces) | 9,000–15,000 ft: ₹1,060 p.m.; above 15,000 ft: ₹1,600 p.m. |
| 12 | Highly active field area allowance (armed forces) | ₹4,200 p.m. |
| 13 | Island (duty) allowance (Andaman & Nicobar / Lakshadweep) | ₹3,250 p.m. |
> Overlap rule: An assessee claiming exemption under items 7 & 8 or 9 is NOT entitled to also claim under item 2.
### C. Transport Allowance for Disabled Employees — exempt under BOTH regimes
Granted to an employee who is blind, deaf-and-dumb, or orthopaedically handicapped (disability in the lower extremities) to cover commuting between residence and place of duty: exempt up to ₹3,200 p.m., irrespective of the tax regime.
### D. Fully exempt only under OTR
- High Court & Supreme Court Judges' allowances (under their respective Conditions of Service Acts, 1954 / 1958)
- UNO salary, allowances and pension (United Nations (Privileges and Immunities) Act, 1947)
- Sumptuary allowance to HC & SC Judges
### E. Fully exempt under BOTH regimes
- Section 10(7): allowances/perquisites paid outside India by the Government to an Indian citizen for services rendered outside India.