Special allowance?

Querist : Anonymous (Querist) 21 September 2011 This query is : Resolved
What is a Special Allowance in the context of Salaries in Delhi?

As per my company, they have termed special allowance as the balancing amount which is as follows:

Cost to Company-Basic Pay=Special Allownce.
Further I'm told that this amount is taxable and I will not be able to claim expenses admissible under the same heading in Direct Tax code.

My question is is it legally correct for the company to loosely use a term "Special Allowance", while not refereing to the Direct tax code?

Since this is resulting is heav tax, what can be my stand against such misleading terms?

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R.Ramachandran (Expert) 22 September 2011
You cannot take any stand much less any legal stand against the practice of the company.
In fact whatever that you receive from your company is taxable in your hands. there are no exemptions except in the case of HRA and Transport Allowance.
A company according to its policy may or may not grant HRA or Transport Allowance. Therefore, you cannot compel the company to declare some amount which is being paid to you as HRA / transport allowance even.

Querist : Anonymous (Querist) 22 September 2011
Thank you for your reply. But what I wanted to know is the defination of Special Allowance? For whatever I was told is that the Direct tax code has a defination for special allowance and exemptiony under that. Can a company change the defination of Special Allowance just because they couldnot adjust the basic?