Tax exemption on Petrol allowance
This query is : Resolved
26 August 2023
Dear Sir,
If a salaried person is getting petrol allowance and he uses his personal car for travelling from home to office and also submitting petrol bills to the company.
Can he get TDS exemption on Petrol allowance if he uses the car only for personal use.
Please help me in this matter.
Thanks,
Divyesh Jain
If a salaried person is getting petrol allowance and he uses his personal car for travelling from home to office and also submitting petrol bills to the company.
Can he get TDS exemption on Petrol allowance if he uses the car only for personal use.
Please help me in this matter.
Thanks,
Divyesh Jain
27 August 2023
TDS exempt to the extent of actual expenses incurred for official purposes
27 August 2023
But is the exemption available if an employee wants it for travelling from home to office
21 January 2024
This is fine, we can claim maximum Rs. 2400 per month x 12 months with supporting bills either with a company-owned car or a personal car
23 January 2024
Ok, and also if you can tell what is the exemption available incase of Driver allowance given by the company?
26 July 2025
Got it! Here’s a clear breakdown about **petrol allowance** and **driver allowance** exemptions for a salaried employee:
---
### Petrol Allowance & TDS Exemption
* Petrol allowance reimbursed by the employer is **exempt from tax only to the extent of actual expenses incurred for official duties**.
* **Travel from home to office is considered personal commuting and is NOT official travel**.
* So, if you are using your personal car only for commuting (home to office and back), **the petrol allowance related to this is taxable and no exemption is allowed**.
* However, **if the petrol bills are for official travel (client visits, office work outside the usual commute), then the petrol allowance for that portion can be exempted**, subject to proof (bills).
* Some companies allow a fixed monthly allowance (e.g., ₹2400 per month) with bills for official use only, but **commuting fuel is not exempt** under tax rules.
---
### Driver Allowance
* **Driver allowance provided by the employer is also taxable unless it is specifically for official duties**.
* If driver allowance is given for **personal use or commuting**, it is fully taxable.
* If driver allowance is **paid as reimbursement of actual expenses incurred for official work**, it may be exempt to that extent.
* For exemption, the employee should submit valid bills and proof that the driver was engaged for official work.
---
### Summary:
| Allowance Type | Use Case | Tax Treatment |
| ---------------- | ------------------------------ | --------------------------------------- |
| Petrol allowance | Official travel (business use) | Exempt to the extent of bills submitted |
| Petrol allowance | Personal travel (home-office) | Fully taxable |
| Driver allowance | Official use | Exempt to extent of bills submitted |
| Driver allowance | Personal use | Fully taxable |
---
If you want, I can help draft a formal note or explain how to maintain documentation to support exemptions. Want me to?
---
### Petrol Allowance & TDS Exemption
* Petrol allowance reimbursed by the employer is **exempt from tax only to the extent of actual expenses incurred for official duties**.
* **Travel from home to office is considered personal commuting and is NOT official travel**.
* So, if you are using your personal car only for commuting (home to office and back), **the petrol allowance related to this is taxable and no exemption is allowed**.
* However, **if the petrol bills are for official travel (client visits, office work outside the usual commute), then the petrol allowance for that portion can be exempted**, subject to proof (bills).
* Some companies allow a fixed monthly allowance (e.g., ₹2400 per month) with bills for official use only, but **commuting fuel is not exempt** under tax rules.
---
### Driver Allowance
* **Driver allowance provided by the employer is also taxable unless it is specifically for official duties**.
* If driver allowance is given for **personal use or commuting**, it is fully taxable.
* If driver allowance is **paid as reimbursement of actual expenses incurred for official work**, it may be exempt to that extent.
* For exemption, the employee should submit valid bills and proof that the driver was engaged for official work.
---
### Summary:
| Allowance Type | Use Case | Tax Treatment |
| ---------------- | ------------------------------ | --------------------------------------- |
| Petrol allowance | Official travel (business use) | Exempt to the extent of bills submitted |
| Petrol allowance | Personal travel (home-office) | Fully taxable |
| Driver allowance | Official use | Exempt to extent of bills submitted |
| Driver allowance | Personal use | Fully taxable |
---
If you want, I can help draft a formal note or explain how to maintain documentation to support exemptions. Want me to?
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