Definition of Conveyance Allowance
Also known as transport allowance, conveyance allowance is offered to the employees of the company to compensate for the travel of the employee from the residence to and from the workplace. This is in addition to the basic salary component and may or may not be taxed under the Income Tax Act. The exemption can be claimed under Section 10 (14 (ii)).
Calculation of Conveyance Allowance
The calculations of the conveyance allowance are based on limits that are absolute at Rs. Rs.1,600 per month or Rs.19,200 per year irrespective of the tax bracket an individual falls into.
Exemptions
Any amount paid above the conveyance allowance limit is charged to tax under the head Income from Salaries. The new tax regime allows an individual to claim the following exemptions – - Allowance by employer to meet the cost of travel on tour or transfer including rail fare, airfare etc. - Allowance by employer to meet daily charges incurred on account of absence from usual place of duty. - Travelling expenses incurred while performing official duties. - Additionally, the exemption can be claimed by an individual salaried employee and it would be as follows- - The exemption limit for orthopedically handicapped and blind people is Rs. 3200 per month. - As per Section 10(45), the conveyance allowance offered to members of UPSC or chairman is not charged to tax.
