03 September 2010
Sir I am a employee in government office .I recived 4200.00 motor cycle allowance per year include my salary . This allowance are exempt income tax act u\s 10(14)(i) but the I.T.O. are levy tax this allowance .He asked it is a taxable allowance i confuse please help me and give me answer that it is a taxable or exempt .
03 September 2010
U/s 10(14)(i) of the income tax act states that , "any such allowance specifically granted to meet expenses wholly , necessarily and exclusively incurred in the performance of the duties of an office or employment of profit to the extent to which such expenses are actually incurred for that purpose"
Pls understand ,the provision says "to that the extent to which such expenses are actually incurred for that purpose" which results the onus to prove the genuineness is on the assessee. Hence u have to prove to the ITO that the allowances is to meet for performance of duties.(If u claim U/s10(14)(i))
03 September 2010
Whatever be the name of this allowance. The nature of it suggest that it is a conveyance allowance & that to the extent Rs. 800/- per month i.e upto Rs. 9600/- is exempt.
CAclubindia
