Regarding salary break-up

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 January 2017 I work through third party HR management in a company. Now the company where I work they are changing the vendor and re recruiting thought new HR company. They have given us a new salary breakup where they did conveyance to nil and added telephone, bonus / ex gratia and vehicle reimbursement section. but my total CTC is the same as previous.

Also the have increased by basic salary

Please suggest if it will affect me tax vise.

Mithun Agarwal

Mithun Agarwal (Expert)
Follow

04 January 2017 Basic - 30 to 40% of CTC
HRA - 50% of Basic
conveyance - 1600
Medical Reim - 1250
Spl All - balance CTC

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2017 Thanks for your reply. but in my new salary breakup they have kept conveyance to nil and added telephone 3000 per month and Vehicle maintenance to 2400 per month. I don't have car but I have two wheeler.

1. what is included under Vehicle maintenance?
2. Can I give my monthly telephone bills for tax exemption?

Could you explain in details because I have very limited knowledge regarding this. If you can further clarify it will be really helpful.

Thanks in Advance

Expert : Anonymous

Expert : Anonymous (Expert)

06 January 2017 telephone bill is disallowed for deduction. conveyance allowance u can take 1600 p.m. or more in behalf of vehicle repaire & maintenance & its allowed for examtion maximum Rs. 1600 p.m.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
Follow

20 July 2025 Got it! Here’s a breakdown and clarification regarding your new salary breakup and tax implications:

1. Vehicle Maintenance Allowance:
What is it?
This is an allowance given by the employer to cover expenses like repairs, fuel, servicing, or maintenance of your vehicle.
Tax Treatment:
If you don’t have a car, but have a two-wheeler, the allowance is still taxable unless your employer classifies it under conveyance allowance.
Conveyance allowance exemption:
Up to ₹1,600 per month (₹19,200 per year) is exempt only if it’s a conveyance allowance for travel between home and office.
If the allowance is specifically labeled as "Vehicle maintenance" but you don’t have a vehicle, or it's not linked to conveyance, it will be fully taxable.
So, you can claim exemption up to ₹1,600 per month if your employer agrees to classify it as conveyance allowance and you can justify your travel expenses for official purposes.
2. Telephone Bill Reimbursement:
Can you submit bills for exemption?
Normally, telephone reimbursement is taxable as a perquisite unless it’s specifically for official use and the employer has a policy for reimbursement against bills.
If you pay the bills and submit proof (bills), employer may reimburse tax-free, but this is subject to employer policy and documentation.
If the telephone allowance is fixed and paid monthly without bill submission, it’s taxable.
Summary for Your Case:
Allowance/Component Tax Treatment
Basic Salary Fully taxable
Conveyance Allowance Up to ₹1,600/month exempt if linked to travel
Vehicle Maintenance Allowance Taxable unless classified as conveyance & used for travel
Telephone Allowance Taxable unless reimbursed against bills
Suggestions:
Talk to HR: Request them to classify vehicle allowance as conveyance if you commute to office, so you get exemption up to ₹1,600/month.
Keep bills: If you pay telephone bills, submit bills to employer for tax-free reimbursement.
Track your allowances: Understand how these are reported in Form 16 and included in taxable income.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok