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Travel Allowance

CA Rishabh Bansal (job) (97 Points)

21 January 2010

Hey

i want to know that after abolishing FBT, the company pay TRAVEL ALLOWANCE to employees.

is it taxable in the hands of employees?

yes under which section ?

let me know all the details related to it that must be known ?

PLS HELP ASAP.

Thanks

Rishabh Bansal

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19 Replies

Shudhanshu Agrawal (Business) (2570 Points)
Replied 21 January 2010

Yeah all those perquisites on which earlier FBT was applicable will be taxed now in the hands of employee and the section will be 17(2)

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CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 21 January 2010

TA to the extent spent for official purpose s exempt

CA Rishabh Bansal (job) (97 Points)
Replied 21 January 2010

hey Sudhanshu,

say company paid 2lacs as travel allowance to me in this FY 09-10.

then it will taxed as perquisite.

what will be the rates

let me know the calculation also.

Rishabh Bansal

swajitha (ca..final) (68 Points)
Replied 21 January 2010

2 my knowledge travel allowance cannot be called as a perquisite..it is received in cash for meeting the travel expenses..so out of 2lakh rupees the amount spent for the purpose can be deducted and the balance is taxable

Shudhanshu Agrawal (Business) (2570 Points)
Replied 21 January 2010

You are talking about those travel allowances which are paid as perquisites. In such a case amount actually spent to meet official duties will be reduced from the amount received and the balance amount will be added to your salary computation and will be taxed according to the slabs.

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CA Rishabh Bansal (job) (97 Points)
Replied 21 January 2010

hey TA is paid for expense but they are not expanded actually

company pays for in lieu of travel

all is personal

this means it will added in salary and taxed as salary

Rishabh

Shudhanshu Agrawal (Business) (2570 Points)
Replied 21 January 2010

Originally posted by : swajitha
	2 my knowledge travel allowance cannot be called as a perquisite..it is received in cash for meeting the travel expenses..so out of 2lakh rupees the amount spent for the purpose can be deducted and the balance is taxable

Dear Swajitha he is not talking about those travel allowances which are considered under section 10(14).

CA Pramod Jain (manager finance) (1577 Points)
Replied 21 January 2010

Originally posted by : rishabh
	hey TA is paid for expense but they are not expanded actually company pays for in lieu of travel so all is personal this means it will added in salary and taxed as salary Rishabh

then in above case it will be fully taxable in your hand as a salary and tds will be calculated as per rules of salary tds

Shudhanshu Agrawal (Business) (2570 Points)
Replied 21 January 2010

yeah they will be fully taxable and considered under salary

CA Rishabh Bansal (job) (97 Points)
Replied 21 January 2010

hey thanks a lot to all of you.

Rishabh Bansal

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manish (Article Assitant) (358 Points)
Replied 21 January 2010

rishabh is not talking about those travel allowances which are considered under section 10(14).

Then sudhanshu ji can tell me which kind of travel allowances is this? Bcoz i also know that travel allowances are as expenses

sudhir rawal (B.COM/PCC/ARTICLE/'O'LEVEL) (314 Points)
Replied 22 January 2010

if rishabh is considering the travelling allowance as for business purpose then it's exempt under section 10

now if it considering perquisites(when amount received in respect of any vacation outing by availing employee or any household other then business) then we consider it for salary . and expenses which are recovered from employee is reduced from amount given by employer and balance perquisites (if balance is positive)

Shudhanshu Agrawal (Business) (2570 Points)
Replied 22 January 2010

Originally posted by : manish
	rishabh is not talking about those travel allowances which are considered under section 10(14). Then sudhanshu ji can tell me which kind of travel allowances is this? Bcoz i also know that travel allowances are as expenses

Dear Manish,

When FBT was introduced by Finance Act, 2005 from 01.04.2005 onwards tax expert started using it as tax planning and what they use to give travel expenses as lumpsum in advance to meet travelling expenses. but now after abolishment of FBT there is no difference in the treatment of travel allowances u/s 10(14) or paid as perquisites.