CA Final
814 Points
Joined January 2008
Yes. You can give, but should have supporting vouchers.
You can re-imburse conveyance expenses for meeting the cost of commutation from office to other places for carrying out office work (i-e for official purposes).
This can be given in two forms;
1. Re-imburse the cost whenever such cost is incurred. This must be done as against a supporting voucher. This action will attract FBT in the hands of Employer and exempt in the hands of employee. OR
2. Give fixed conveyance allowance as a part of employee's CTC - This action will NOT attract FBT, as the same will be taxable in the hands of employee.
As regards Petrol re-imbursements, this can be given as Transportation allowance(i-e from employees home to office and fro).
But giving petrol re-imbursement for the same work for which conveyance expenses were re-imbursed will raise suspicion.
If petrol expenses are re-imbursed, this will attract FBT in the hands of employer.
For both re-imbursements, voucher must be available. If not, then atleast an expense voucher in Company's letterhead must be signed and authorised by the appropriate authority.