Conveyance Allowance in India

Conveyance Allowance Exemption Limit for AY 2024-2025

Conveyance allowance can be claimed by salaried employees for work-related expenses. There is no limit to the conveyance allowance amount that employers can provide employees. Depending on the company, the allowance amount may vary. However, the exemption amount will not change.

Given below are some exemptions:

1. Under Section 10(45) of the Income Tax Act, no tax needs to be paid by UPSC members on conveyance allowance.

1. For orthopedically handicapped or visually impaired individuals, the tax exemption limit on conveyance allowance is Rs.3,200 per month.

According to the rules of the Central Board of Direct Taxes (CBDT), no documents need to be submitted by employees to claim benefits. The benefits are available under the new tax regime.

How to Calculate Conveyance Allowance?

There are no complicated calculations involved in calculating conveyance allowance limit. The limits are absolute at Rs.1,600 per month or Rs.19,200 per year irrespective of the tax bracket an individual falls into.

A point to note here is that the exemption for conveyance allowance can be grouped with some other allowances, for instance Special Allowance. So, if your employer is offering you a Special Allowance of Rs.5,000 per month which is fully taxable, you can substitute Rs.1,600 as conveyance allowance and claim tax exemptions for the same. However, you should only do this after consultations with your personal tax advisor.

Latest information on conveyance allowances for Central Government Employees

Consolidated Travelling Allowance

1. A permanent monthly traveling allowance may be granted by a competent authority to any government servant whose duties require him/her to travel extensively.
2. Such an allowance shall be in lieu of all other forms of travelling allowance for journey within the Government servant's sphere of duty and may be drawn all the year round, whether the Government servant is absent from his headquarters or not.
3. A permanent travelling allowance shall not be drawn during leave, temporary transfer, or joining time or, unless otherwise expressly provided in the rules in this chapter, during any period for which travelling allowance of any other kind is drawn.

How to Fill Tax on Conveyance Allowance?

The below-mentioned process can be followed to report conveyance allowance when filing tax returns:

1. Determine the amount that you can avail as an exemption. Tax needs to be paid for the excess amount.

1. Check if the conveyance allowance is mentioned in the salary slip. The conveyance allowance is usually mentioned in the salary slip.

1. The exempted amount must be deducted from the total conveyance allowance.

1. In case the conveyance allowance is more than the exempt limit, tax must be paid for the additional amount.

1. Deductions can be claimed if the employee uses his/her vehicle.

Conveyance Allowance Exemptions

Some of the exemptions under conveyance allowance are mentioned below:

1. Only for Work Purposes: Exemption is provided only for travel that is work-related. Tax needs to be paid otherwise.

1. Personal Vehicle Usage: Subject to the approval of the employer, exemptions may be claimed for fuel costs.

1. Proof of Expenditure: To claim exemptions, proof of expenditure must be provided.

1. Limit: Up to Rs.1,600 per month can be claimed as an exemption.

Up to Rs.1,600 can be claimed per month as conveyance allowance. This can help in saving tax. Conveyance allowance is part of the employee’s salary. However, tax must be paid if expenses are above the limit. Required documents must be submitted to claim conveyance allowance.