Income-tax allowance financial definition of income-tax allowance
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income-tax allowance or
personal allowance the amount of income that a person is allowed to earn before beginning to pay INCOME TAX. In the UK, for example, the personal allowance is currently (2005/06) £4,895 for a single person. In addition, older persons, widows, single-parent families, married couples and blind persons receive an extra personal allowance so that they are able to earn more before paying tax.