17 July 2012
These are the details of FORM 16 of my sister .Can you please tell me which of the following would be exempt income???
Basic Salary 184500.00 Fixed DA 7800.00 Conveyance Allowance 51300.00 House Rent Allowance 57690.00 Children Education Allowance 9000.00 Children Hostel Allowance 15000.00 Uniform Allowance 17220.00 Medical Allowance 1042.00 Bonus 40000.00 Other Allowances 216000.00 Other Reimbursement 5100.00
I would specially like to know about the taxability of "other reimbursements".The details of reimbursements and other allowances are not given. Plzz reply soon.
18 July 2012
Transport allowance or any named allowance which is specifically provided for transport between residence to office is exempted Rs.800 per month.
I was under the presumption your conveyance allowance is nature of i said above. because most of the companies providing that is as Conveyance allowance only. if you are very clear about that is not for the above said purpose then your case conveyance allowance is exempted up to the official usage only.
18 July 2012
So is it possible that transport allowance is mentioned as conveyance allowance in form 16??? how does one know whether it is actually conveyance or transport allowance, because no purpose is mentioned in the agreement.
Clarification regarding taxability of transport allowance
References have been received as to whether the transport allowance granted to the Central Government employees on the recommendations of the Fifth Central Pay Commission forms part of taxable salary for the purposes of deduction of tax at source.
2. The matter has been considered by the Board. The transport allowance granted to the employees of the Central Government is to compensate them for the cost incurred on account of commuting between the place of residence and the place of duty. This allowance cannot be said to have been granted to meet expenses incurred wholly, necessarily and exclusively in the performance of the duties of an office or employment of profit. The said allowance is, therefore, not covered by the provisions of section 10(14)(i) of the Income-tax Act, 1961, read with rule 2BB(1)(c) of the Income-tax Rules, 1962. It is further clarified that any allowance, by whatever name called, granted by an employer, which has the element of compensation of the expenditure incurred on commuting from residence to office or vice versa, will also not qualify for the benefit under section 10(14)(i).
3. Accordingly, the persons responsible for paying any amount of the above nature, should treat the same as part of taxable income and deduct tax at source at the appropriate rates under the relevant provisions of the Income-tax Act, 1961.
Circular : No. 764, dated 20-2-1998.
Note : See rule 2BB, as amended w.e.f. 1-8-1997, which exempts transport allowances (to the extent of Rs. 800 p.m.) granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.
this is asseessee`s responsibility to prove the allowance nature.
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