Is the conveyance allowance paid to physically handicapped employees taxable income?
8 Replies
Ashish Sharma
(Service)
(1028 Points)
Replied 08 February 2010
Hi,
As per Income Tax rules conveyance allowance Exempt Up to 1600/- P.M. for Handicap employees
Amir
(Learner)
(4016 Points)
Replied 08 February 2010
Dear Chanakya,
In one of earlier queries I made amistake in the name of allowance but now I wil make sure that such thing doesn't happen this time..
Look, u can call an allowance by any name doesn't matter - what has to seen is the purpose
In Income Tax Act -
1) Transport Allowance - For commuting between Residence & place of work -
Lower of the following is exempt -
a) Amount Received
b) Rs. 800/month (In case of Blind/Handicapped Employees - Rs. 1,600/month)
Now in this case actual expenditure is irrelevant, no need to collect bills/undertaking from employees..
2) Conveyance allowance - For performing official duties
Lower of the following is exempt
a) Amount received
b) Amount Spent on performing duties
Now, in this case employer should collect proof of expenditure like bills/undertakings,etc
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 08 February 2010
Getting confused MrAmir when u say allowance i dont think so for any proof required but here you have distinguished between Transport and Coveyance under what section is this covered .I think in 10(14) under speacial allowance i have read transport allowance which you have pointed out then where in the act that it speaks about conveyance allowance please clarify waiting for your reply
Amir
(Learner)
(4016 Points)
Replied 08 February 2010
Dear Sivaram,
U r rite that the term conveyance allowance is not used by Law, the relevant provisions of Rule 2BB are as follows-
(c) any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit :
Provided that free conveyance is not provided by the employer;
CA Dharmendra maheshwari
(MANAGER)
(106 Points)
Replied 08 February 2010
transport allowances up to 1600/- allowed ir respective of exp.however transport allowance up to exp. done by employee is exempet..
Ram Prakash Gautam
(Manager Accounts & Taxation)
(1006 Points)
Replied 10 August 2010
right agree with amir
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