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Travel Expenses

Reviewed by Sweta | Updated on Sep 30, 2020

Catalogue

Introduction

Travel expenses refer to the expenditure incurred on travelling for the purpose of carrying on any business or profession or employment. A taxpayer can claim the deduction for travel expenses while calculating their income from a particular source. Apart from business expenses, travelling expenses are eligible for deduction from income from other sources.

Understanding Travel expenses

Travel expenses consist of fuel costs, taxi fare, bus fare, metro rail fare, airfare, or charges for any other type of transportation. In a case where the means of transport is owned by self, such as a two-wheeler or four-wheeler, the travel expenses will include petrol or diesel costs per kilometre for the entire distance travelled.

In the case of public transport, travel expenses are the charges incurred for hiring a taxi or paying for metro rail services until the airport and then the cost of air tickets. The entire cost of travel from the point of residence to the destination is eligible for deduction. One may also claim the toll charges or charges for inter-state permits as part of travelling expenses.

An individual who is employed can claim reimbursement for travelling expenses incurred as part of the performance of duties or tasks of employment. Many explorers reimburse the costs either as part of the salary package or separately.

An employee should provide bills for the travelling costs or a self-declaration to claim the reimbursement. The reimbursed amount is exempt from tax for the employee.

There is no deduction for travelling expenses incurred on personal trips. In the case of combining personal trips with business trips, a deduction is available only for the portion attributable to the business. The expenses on travelling for personal reasons or for travelling costs of the spouse or other relatives are not eligible for deduction.

Conclusion

Travelling expenses can include the entire cost of a business trip, including travel costs, accommodation, meals, communication costs, and other incidental costs for business.

In certain cases, there may be an upper limit for claiming reimbursement for expenses. Certain companies provide a daily allowance for employees who go to a foreign country on short-term assignments. A deduction can be claimed to the extent of actual expenses incurred, and the balance gets taxed as salary.

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