Conveyance Allowance - Meaning and Exemption Limit

The allowance offered by a company to its employees to cover their travel expenses to and from his residence to the workplace is called "conveyance allowance". This allowance is normally offered in addition to the salary of the employee and may or may not be taxable under the Income Tax Act of India.

Is Conveyance Allowance Taxable?

Section 10(14)(ii) Of Income Tax Act and Rule 2BB of Income Tax Rules does provide for exemption of Conveyance Allowance up to Rs 19,200per annum or Rs 1,600 per month from being taken as a part of the Taxable Income .

The taxable limit of the conveyance allowance used to be Rs 800 per month and Rs 9600 per year till April 2015 but the limit was then extended to INR 1600 per month and INR 19,200 per year according to the results Budget 2015 India, with the idea of providing tax benefits to the middle class tax payer.

To claim exemption for the full amount of Rs 1600 per month one need not provide any proof of it having been received from the employer in the capacity of conveyance allowance .

How to Calculate Conveyance Allowance?

The limits instituted for the conveyance allowance exemption are Rs1600 per month and Rs 19,200 per year irrespective of the tax bracket of the individual. But if an individual is being given some special allowance by his employer and if this special allowance is fully taxable then he can substitute Rs 1600 from it as conveyance allowance and claim tax exemption of mentioned amount per month.

But this should be done under the expert guidance of the personal tax advisor lest any legal complications arise. Before April 2015 handicapped people were given a higher limit of Rs1600 per month and Rs 19,200 per year as conveyance allowance but the Budget 2015 made this exemption uniform for all categories of taxpayers.

Consolidated Travelling Allowance

A permanent monthly travelling allowance can be given to competent authority of government service that has to travel extensively due to call of duty. This allowance is in lieu with other forms of allowances for travelling for journey in the government servant’s limits of duty. It can be availed all the year round, be it the government servant being absent from the headquarters or not. This allowance is not available on taking a temporary transfer, leave, joining time, unless expressively provided in the chapter rules during a period when travelling allowance of other kind is drawn.

Conveyance Allowance for Central Government Employees

  • The average monthly travel allowance on official duty for owned motor car that journeys between 201 and 300 km is Rs. 1,120, while the allowance is Rs. 370 by other modes of conveyance.
  • The average monthly travel allowance on official duty for owned motor car that journeys between 301 and 450 km is Rs. 1,680, while the allowance is Rs. 480 by other modes of conveyance.
  • The average monthly travel allowance on official duty for owned motor car that journeys between 451 and 600 km is Rs. 2,070, while the allowance is Rs. 640 by other modes of conveyance.

FAQs on Conveyance Allowance

  • addFAQs
    1. What is the amount of exemption one can claim on conveyance allowance?
    2. Under Section 10 (14(ii)) of the Income Tax Act, the maximum exemption on conveyance allowance available is Rs. 1,600 per month, which is worth Rs. 19,200 for a year.

    3. In which cases the conveyance allowance is higher than Rs 19,200 is a year?

    People who are orthopedically handicapped and blind can avail exemption on conveyance allowance amounting to Rs. 3,200 per month as against the limit of Rs. 1,600 per month for other individuals.

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