Port Blair, Feb 14: The Non-Gazetted Govt. Officers’ Association, Andaman and Nicobar Islands has demanded exemption of Island Special Duty Allowance from Income Tax for the government employees working in Andaman and Nicobar Islands. In a letter sent to Shri P. Chidambaram, Minister of Finance, Government of India, New Delhi, Shri D. Ayyappan, General Secretary of the Association, referring to his earlier representations to the Ministry of Finance on the matter, has 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. He said that this Allowance was introduced to compensate for the unfavourable working condition under which the government employees are working in these islands. Unfavourable climatic condition, backwardness, high cost of living prevailing here, etc were some of the grounds for accepting the demand for this Allowance by the Govt. of India, he informed the Finance Minister.
However, this Allowance has been included in the taxable income while calculating income tax. Shri Ayyappan, submitted to the Finance Minsiter 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. He further informed the Finance Minister that defence personnel posted in these islands are exempted from paying income tax on this Allowance.
The Finance Minister was requested to examine this matter and exempt the Island 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 Andaman and Nicobar Islands.
