Rs. 1600 pm exemption of conveyance allowance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2017 Dear Experts,
our employees salary structure consist the Rs. 1600 PM conveyance Allowance not transport allowance however as per me this exemption is for transportation allowance not for conveyance. since our employees salary structure consist the conveyance allowance. does that mean this entire Rs. 1600 will be taxable or exempt

Thanks In Advance
Priyanks Jaiswal

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 May 2017 Conveyance allowance, also called Transport Allowance is a type of allowance offered to employees of a company to compensate for their travel from residence to and from respective workplace location.
Conveyance allowance is given an exemption of up to Rs.19,200 per annum or Rs.1,600 per month. The sections under which this exemption is applicable are Section 10(14)(ii) of Income Tax Act and Rule 2BB of Income Tax Rules.

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2017 sir. transport allowance and conveyance allowance is two different allowance.. u/s 10(14)(ii) this is transport allowance Not conveyance Hence as per me it should be taxable...

your view please

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 May 2017 Transport allowance and conveyance allowance one and the same exempt from tax to the extent of Rs 1600 pm.

Expert : Anonymous

Expert : Anonymous (Expert)

16 May 2017 I endorse the view given by SEETHARAMAN

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2017 Dear sir... the definition of these two allowances may be read as follow,

Transport allowance is granted to an employee to meet his expenditure for the commuting between the place of his his residence & the place of his duties whereas conveyance allowance is grant to meet the expenditure incurred in performance of his duties of an office,

in the above interpretation the purpose of both the allowances is different. inspite that will both these allowance definition be irrelevant to grant to exemption of 1600 PM as per income tax norms?

please thrown the light on this confussion..

Thanks
ASAP

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 May 2017 The conveyance allowance given by your company of Rs 1600 is for commuting between the place of residence and office that is why it is fixed per month and the amount matches with exemption limit. If it is granted for performing official duties it will vary every month.

CA Priyanka Kushwaha

CA Priyanka Kushwaha (Expert)
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17 May 2017 You are right that Income Tax Rules, specifically uses term 'Transport Allowance' and it provides exemption towards any expenditure incurred by employee for commuting between residence and office of the employee. Generally word 'conveyance allowance' is also used in place of 'transport allowance', however purposes of both allowances remains same i.e. expenditure to commute between residence and office. Therefore, instead of going with only term used, please also check the underlying purposes for which allowance is being paid.

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