Exemption of transport allowance with free bus facility

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2016 dear all,

in our organization, one of the component is transport allowance.
A) for employees below DGM grade, company provides free bus facility.
B) for DGM and above, company provides leased car for official as well as personal use. company deduct from salary the amount, if any, in excess of prescribed lease rent. company also reimburse the amount of fuel upto 125 liter per month. in excess of 125 liter, employee has to bear. we tax the car perquisite as per income tax rules.

I would like to know whether we can claim exemption of transport allowance in both the above cases?

Amol S Joglekar

Amol S Joglekar (Expert)
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08 April 2016 The question oscillates between "Legal Morality" and "Moral Legality"
The answer can go both ways.
I think you need to take the call based on the PHILOSOPHY of your company.
Like for example. TATA companies will make it taxable depending upon the purpose of transport allowance.
While some other companies (Allow me not to quote the name) might treat it as exempt as nothing as such is mentioned in the "literaligis" of the Act

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