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Definition: Parsonage Allowance
The term housing allowance generally means allowance for their basic accommodation for employee and is generally excluded from the employee gross income. They are exempted from taxation from ones income but are subjected to taxation under self-employment taxation laws. This is provided to the employee who rents private accommodation. Various forms of housing allowance are present in different countries such as basic allowance for housing for military personnel in U.S.A, local housing allowance in England, Scotland and Wales, his is basically a housing allowance for ministers.
Parsonage allowance specifically means housing allowance given by religious body such as church to their clergy. It usually covers fair share of market rental value and certain portion annual maintenance. the allowance paid is generally based on the concept of Broad Market Rental Areas(BRMA). BRMA is defined as the area within which an individual is expected to avail all the facilities such as health, education ,recreational ,transport facilities and other basic services.
The allowances provided vary depending upon the eligibility criteria of the individual, living standard of the city etc.