Conveyance allowance

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Rama Mahawar (Querist)

18 June 2010 1 What is the diffrence between,Conveyance allowance and transport allowance given by employer?

2 Can both be availed at a same time?

3 What is the tax benefit?

4 can employee avail car facity and transport allowance facility at a same time?

Please clarify.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)

18 June 2010 Hi Rama,

I think 1) The both are same - only difference is how we call it.

2)Generally different pay heads are used in pay structure as there is no point to give same type of allowances.

3)The deduction for the same is Rs. 800 per month for transport/conveyance allowance, so if the amount is more, then the excess portion is taxable.

4)There is no pronouncement that an employee should not get car facility along with conveyance/transport allowance. But it's not logical to me to allow such practice. Enjoying car facility is also taxable for tax paying employees if the car is not used wholly for official purpose(as perquisite) .

car facility between office and residence is tax free and aforesaid Conveyance/transport allowance is also given for the same purpose.

Regards Sanjay

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

18 June 2010 Conveyance allowance is normal conveyance to the employees for doing offical duties during the work which is exempted up to the offical usage

Transport allowance specifically given for the purpose of Resident to office transportation which is exempted Rs.800 per month

There is no restriction for claiming the conveyance and transport allowance same time only condition conveyance offical purpose need to be justifed

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)

18 June 2010 Thanks Ramesh for correcting me about Conveyance allowance which is exempted on the basis of actual expenses incurred on official duty.

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