Conveyance/Transport Allowance in India

Employer offers conveyance allowance to its employees for travelling from home to workplace & vice-versa. It is taxable if it crosses the exemption limit.

The employers offer many allowances to their employees. One such allowance is given for conveyance. The allowance given to the employees for travelling from residence to their workplace and vice versa is termed as conveyance allowance. This allowance is in addition to the basic salary structure that the employee receives. The employer generally offers conveyance allowance in case it does not offer any transport facility to its employees.

Conveyance Allowance Exemption

The exemption under section 10 sub-section 14(ii) of the Income Tax Act and Rule 2BB of Income Tax rule provides for conveyance allowance exemption. The conveyance allowance exemption limit is Rs. 1600 per month (Rs. 19200 per year). Any amount paid above the conveyance allowance limit is charged to tax under the head Income from Salaries. The exemption can be claimed by an individual salaried employee.

Special Exemption Cases

• 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.