Income tax & HRA

1.Conveyance allowance is granted to meet the expenditure on conveyance in performance of duties of an office.

Maximum amount exempt from tax is to the extent the allowance is used for the performance of duties of an office.

EXPENDITURE FOR COVERING JOURNEY BETWEEN OFFICE AND RESIDENCE IS NOT TREATED AS EXPENDITURE IN PERFORMANCE OF OFFICIAL DUTY.IT IS CALLED TRANSPORT ALLOWANCE AND RS. 800 PER MONTH IS EXEMPT FROM TAX.

2.HRA

The least of the following is exempt from TAX:

1. Actual house rent allowance received from your employer
2. Actual house rent paid by you minus 10% of your basic salary
3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro