Question 1

An allowance to meet the expenses in connection with the rent of the house, by whatever name called

Accepted Answer

House Rent Allowance (HRA) is specifically designed to meet expenses related to renting a house for accommodation.

Question 2

It is an extra amount given to an employee to meet the burden of inflation or increased cost of living.

Accepted Answer

Dearness Allowance (DA) is specifically designed to offset the impact of inflation on an employee's earnings, helping them manage the increased cost of living due to inflation. House Rent Allowance (HRA) is intended for housing expenses and is not directly linked to inflation adjustments.

Question 3

Which of the allowances are fully taxable

Accepted Answer

All of the allowances listed - Dearness allowance, Lunch allowance, and Medical allowance - are considered fully taxable under most tax jurisdictions, as they are part of an individual's total income.

Quiz 1: Income Taxation and Allowances

An allowance to meet the expenses in connection with the rent of the house, by whatever name called

It is an extra amount given to an employee to meet the burden of inflation or increased cost of living.

Which of the allowances are fully taxable