As per Income Tax Act (Refering old regime of taxation) the special allowance is granted to the members of armed forces in the nature of Island (duty) allowance in Andaman and Nicobar and Lakshadweep group of Islands is exempted upto .......... per month.

The correct answer is - ₹ 3,250 p.m.

Key Points

• Exemption under Income Tax Act:
  • As per the Income Tax Act (Old Regime), specific allowances granted to members of the armed forces are exempt from income tax.
  • The exemption applies to allowances for performing duties in unique and challenging conditions, such as remote islands.
• Island Duty Allowance:
  • This allowance is granted to armed forces members posted in the Andaman and Nicobar Islands and the Lakshadweep Islands.
  • The allowance is exempted from income tax up to a limit of ₹ 3,250 per month.
• Correct Answer:
  • The exemption limit is specifically ₹ 3,250 per month, making Option 4 the correct choice.

Additional Information

• Other Special Allowances for Armed Forces:
  • The Income Tax Act provides exemptions for other allowances, such as:
    • High Altitude Allowance: Exempt up to ₹ 1,060 per month (for altitudes of 9,000–15,000 ft) and ₹ 1,600 per month (for altitudes above 15,000 ft).
    • Field Area Allowance: Exempt up to ₹ 2,600 per month.
    • Counter Insurgency Allowance: Exempt up to ₹ 3,900 per month.
• Conditions for Exemption:
  • These exemptions are applicable only to armed forces personnel, not to civilians working in the same regions.
  • Exemptions are subject to specific limits as defined by the Income Tax Act.