Some companies give it only against medical bills, some do not ask for bills, rather bills are only demanded for Final Tax Computation at the end of the year.

Some companies give it monthly, some quarterly, half yearly or yearly also. Medical Allowances / Reimbursements - Can be given against bills or without bills does not matter. No proof required.Ĥ.Children’s education allowance - Tax Benefit: Rs.100 per child subject to max 2 children. Tax Benefit:Exempt maximum up to Rs.800/- per month. Transport Allowance - Supposed to be conveyance allowance meant for transportation between office and residence only. Tax Benefit:Excess of Actual rent paid over 10% of Basic salary OR Maximum HRA allowed (50% or 60% of basic) OR Actual Rent Paid – whichever is lower is Exempt from Tax.ģ. House Rent Allowance (HRA) - Maximum 50% basic (Metro cities) 40% basic (non metro cities). Bifurcation is fine as start up venture and you can add more tax free (Full or Partial) heads as mentioned below but i will suggest that you must fix the compensation policy first followed by grading system to avoid any hassle in future.Ģ.