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conveyance allowance exemption

Abansal ( Manager) (121 Points)

21 December 2009

hi all

we are giving conveyance allowance to our employees in there salaries. now to claim exemption, law says" as per actual expenditure done by employees"

previously supreme court ruling given last year has said that no proof of expenditure is required for claiming deduction in LTA and conveyance allowance.

so our company stoped taking proof of claim , but i donot think this is a proper policy for giving deduction.

kindly advise what is the propwer way, to give deduction without getting proof or is there any other formal way to give deduction . if yes, kindly advise of some formal way of giving deduction, so that my company is safe in future.

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10 Replies

CA Jayesh Gokalgandhi (CA in Industry) (126 Points)
Replied 21 December 2009

Conveyance allowance (i.e. allowance for commuting from residence to office) is exempt upto Rs. 800 per month without any requirement of documentation.

You may look at other allowances like Meal Coupon and uniform allowance where no proof is required for exemption.

Would also like to mention that it is a misconception that proof is not required for claiming LTA. Law has specified certain conditions for exemption of LTA. Even if the company does not ask for documents it will have to atleast satisfy itself that the amount claimed is as per these conditions (like say comparision with 3tier AC fare etc)

Sumit A. Raval (Student) (190 Points)
Replied 23 December 2009

As per Income tax act, conveyance allowance is exempt up to Rs.800/- & for that there is no ned to produce any document. So Don't worry... & just make a payment voucher to pay the same....

GAURAV KUMAR SINGH (cwa) (23 Points)
Replied 08 July 2011

CAN WE GIVE CONVEYANCE ALLOWANCE TO DIRECTOR IF THE COMPANY HAS PROVIDED A CAR TO HIM,,,????? PLEASE REPLY FAST

THANKS IN ADVANCE

Jinesh Aggarwal (Service Man) (45 Points)
Replied 14 September 2011

Dear All,

There is a difference between conveyance allowance & transport allowance. Transport allowance is exempted upto Rs. 800 P.M. but conveyance allowance is exempted on actual expenditure basis. Yes, as per apex court no proof of expenditure is required for claiming deduction in LTA and conveyance allowance.

The proper way, to give deduction without getting proof, is

1. Conveyance should be part of the taxable salary.

1. Monthly Conveyance sheet shoud be authorised by the head of department or high authority of concern deptt.

2. Following detail should be mentioned in coveyance sheet.

Dete of journey

Location

purpose

Name & Address of Party

3. It should be cross verified from attendance register or any other register maintained by HR department for OD.

1 Like

shankar (CA, CS Final) (243 Points)
Replied 10 July 2012

i agree with Jinesh

Randheer Singh (Accountant) (21 Points)
Replied 24 January 2014

Hi All

If I am a salaried person and company was not provide me conveyance. In this condition can I avail exemption of conveyance in Income Tax

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2010 Points)
Replied 26 January 2014

if company does not provide conveyance allowance than you are not eligible to take benefit of exemption

Praveen (ARTICLE) (21 Points)
Replied 04 March 2014

whether conveyance expense can be paid in cash, if yes than how much amount can be paid at a time and allowable in the hands of company under income tax act 1961

rohit (accountant) (22 Points)
Replied 24 September 2014

A person who is director of 2 companies in full yaer. And both companies take conveyance exepmtion u/s 10 Rs.9600/-. Then which amount should we take as an exemption for filing Income tax return???? Is amount from both of companies are allowable for exemption????

Please Help.

niraj srivastava (Assistant Manager A/c) (22 Points)
Replied 20 December 2014

If we pay our employee conveyance allowance in his salary and exemption of conveyance in income tax @ 800 per month, but he present us Fuel bill on monthly basis and asked me for exemption of our fuel bill in income tax calculation.

Please advise me that how is fuel bill consuption calculated in income tax in place of Conveyance which is encluded in salary and also told me that is we exempt the conveyance and fuel bill both in income tax calculation or any of one.

Niraj Srivastava

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