Demand to Exempt ISDA from Income Tax
The Non-Gazetted Govt. Officers’ Association, Andaman and Nicoabr Islands has demanded exemption of Island Special Duty Allowance (ISDA) from the Income Tax. In a letter sent to the Secretary in the Department of Expenditure, Ministry of Finance, Govt. of India, New Delhi recently, Shri D. Ayyappan, General Secretary of the Association said that the government employees working in the Andaman and Nicobar Islands are being paid Island Special Duty Allowance ranging from 12 ½% to 25% depending upon the area of posting. However, this Allowance has been included in the taxable income while calculating income tax. He said that though this Allowance can be classified as compensatory in nature taking into account the high cost of living and other unsuitable conditions prevailing in the Andaman and Nicobar Islands, the same has not yet been excluded from the taxable income. Shri D. Ayyappan informed the Secretary (Expenditure) that Defence personnel posted in these islands are exempted from paying income tax on this Allowance.
He has requested the Secretary (Expenditure) to examine this matter and exempt the Islands Special Duty Allowance from income tax treating this Allowance as compensatory in nature, which will be of great relief to thousands of government employees working in the Andaman and Nicobar Islands.
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