Travelling allowance to Director using office car
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 March 2010
If a director is using office car for commuting between place of business and residence, will he be eligible to claim the deduction of Rs.9600 pa for Travelling Allowance being part of salary??
03 March 2010
Only transport allowance is exempted Rs.800 per month. travelling allowance offical purpose is exempted otherwise fully taxable
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 March 2010
Mr. Ramesh thanks for your reply, but to my understanding TA is exempt only if utilised for commuting between office and residence which is not official at all.
Hence my query is still there. As the director is using office car both for official and personal purpose and petril cats is borne by office and we are adding Rs. 1600 p.m. as taxable perquisite in his income. The how can he claim deduction for Rs.9600 pa when he is not utilizing this Rs.9600 at all for commuting between office and residence.
Please clarify??
Hence my query is still there. As the director is using office car both for official and personal purpose and petril cats is borne by office and we are adding Rs. 1600 p.m. as taxable perquisite in his income. The how can he claim deduction for Rs.9600 pa when he is not utilizing this Rs.9600 at all for commuting between office and residence.
Please clarify??
02 August 2025
Great question — this is a nuanced area in tax treatment!
Here’s the breakdown:
---
### 1. **Transport Allowance under Income Tax**
* **Section 10(14) read with Rule 2BB** provides an exemption of **₹800 per month (₹9,600 per year)** on **transport allowance** paid to employees **specifically to meet the cost of commuting between residence and office**.
* This exemption applies only if the allowance is actually given for this purpose — i.e., commuting **between home and office**.
---
### 2. **Director Using Office Car for Commuting**
* In your case, the **director is using the office car both for official duties and commuting**.
* The **petrol cost is borne by the company**, and the company adds **₹1,600 per month as a taxable perquisite** in his income for the **personal use of the car** (which is correct as per tax rules on perquisites).
* Since the director **does not receive any separate transport allowance** from the employer (other than the perquisite for personal car use), he **cannot claim the ₹9,600 exemption** because:
* The exemption applies only when an actual **transport allowance is paid** to meet commuting cost.
* Here, the director is **not spending out of his own pocket for commuting**, and thus no allowance is received to claim exemption.
* The taxable perquisite for personal use of office car **actually increases his taxable income**.
---
### 3. **Summary**
| Situation | Tax Treatment |
| ---------------------------------------------------------------------------------- | ------------------------------------------------ |
| Employee/Director receives transport allowance for commuting | Exemption of up to ₹9,600 per annum is available |
| Employee/Director uses office car with petrol paid by company and perquisite added | No exemption, taxable perquisite added in income |
| Director not receiving transport allowance, only perquisite for car use | No deduction/exemption for ₹9,600 allowed |
---
### Conclusion:
Since your director is not receiving any transport allowance but instead enjoying a taxable perquisite for personal use of office car, **he cannot claim the ₹9,600 exemption under transport allowance**.
---
If you want, I can help you draft this explanation for internal communication or further clarifications. Would that help?
Here’s the breakdown:
---
### 1. **Transport Allowance under Income Tax**
* **Section 10(14) read with Rule 2BB** provides an exemption of **₹800 per month (₹9,600 per year)** on **transport allowance** paid to employees **specifically to meet the cost of commuting between residence and office**.
* This exemption applies only if the allowance is actually given for this purpose — i.e., commuting **between home and office**.
---
### 2. **Director Using Office Car for Commuting**
* In your case, the **director is using the office car both for official duties and commuting**.
* The **petrol cost is borne by the company**, and the company adds **₹1,600 per month as a taxable perquisite** in his income for the **personal use of the car** (which is correct as per tax rules on perquisites).
* Since the director **does not receive any separate transport allowance** from the employer (other than the perquisite for personal car use), he **cannot claim the ₹9,600 exemption** because:
* The exemption applies only when an actual **transport allowance is paid** to meet commuting cost.
* Here, the director is **not spending out of his own pocket for commuting**, and thus no allowance is received to claim exemption.
* The taxable perquisite for personal use of office car **actually increases his taxable income**.
---
### 3. **Summary**
| Situation | Tax Treatment |
| ---------------------------------------------------------------------------------- | ------------------------------------------------ |
| Employee/Director receives transport allowance for commuting | Exemption of up to ₹9,600 per annum is available |
| Employee/Director uses office car with petrol paid by company and perquisite added | No exemption, taxable perquisite added in income |
| Director not receiving transport allowance, only perquisite for car use | No deduction/exemption for ₹9,600 allowed |
---
### Conclusion:
Since your director is not receiving any transport allowance but instead enjoying a taxable perquisite for personal use of office car, **he cannot claim the ₹9,600 exemption under transport allowance**.
---
If you want, I can help you draft this explanation for internal communication or further clarifications. Would that help?
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