Treatment of Car allowance


This query is : Resolved 

Quick Summary
This discussion explores the tax implications of receiving a car allowance. The original poster receives a £10,000 monthly car allowance but uses a company-provided cab service, incurring a £5,000 monthly deduction. They are seeking clarification on whether deductions or exemptions are permitted under income tax regulations. The consensus suggests that the allowance is fully taxable, and no deductions are allowed for the cab expenses incurred.

12 April 2025 Dear experts,
I am getting rs.10000 per month as car allowance which is part of my gross salary. As I am using cab facility given by company for commuting to office and back home (official duty) I have to pay rs.5000 per month which is deducted in my salary and paid to private transport operators who are providing cabs.
Is deduction or exemption allowed in income tax, if yes how much and which regime? Please give your expert opinion.
Thanks in advance.

13 April 2025 1. https://cleartax.in/s/tax-benefit-salaried-employee-car-provided-employer

2. https://incometaxmanagement.in/perquisites-valuation-of-motor-car-other-vehicles-rule-32/

3. https://incometaxindia.gov.in/Pages/tools/motor-car-facility.aspx

13 April 2025 My case is different

Manish (Expert)
14 April 2025 10,000 p.m. is fully taxable, and no deduction is allowed for 5,000 paid for cabs.


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