What is Conveyance Allowance?
Conveyance allowance, also called Transport Allowance is a type of allowance offered to employees of a company to compensate for their travel from residence to and from respective workplace location. Allowances are generally offered to employees on top of their basic salary component and may or may not be taxable as per the Income Tax Act.
In general, conveyance allowance is paid by an employer only if the there is no transportation provided by the employer. In case an employer offers office transport, conveyance allowance will not be provided to employees.
Conveyance Allowance Limit for FY 2016-17 & AY 2017-18
There is no limit on the amount of conveyance allowance a company can offer to its employees. However, there is a limit on the amount of exemption under the Income Tax Act as detailed below.
Is Conveyance Allowance Taxable?
Conveyance allowance is given an exemption of up to Rs.19,200 per annum or Rs.1,600 per month. The sections under which this exemption is applicable are Section 10(14)(ii) of Income Tax Act and Rule 2BB of Income Tax Rules.
Before April 2015, the conveyance allowance taxation exemption limit was capped at Rs.800 per month or Rs.9,600 per annum. The exemption limits were extended to Rs.1,600 per months or Rs.19,200 per year in Budget 2015 with an eye to provide tax benefits to the middle class taxpayers in the country.
You do not need to furnish any documents or proof of receiving conveyance allowance from your employer. The full amount of Rs.1,600 per month can be claimed as tax exemption under travel or conveyance allowance.
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.
What is the Conveyance Allowance for Handicapped People?
Handicapped people used to receive a higher limit of Rs.1,600 per month or Rs.19,200 per year as conveyance allowance before April 2015 as compared to other categories of taxpayers. However, Budget 2015 made the exemption limit uniform across all categories of taxpayers at Rs.1,600 per month.
Conveyance Allowances to Central Government Employees
|Average monthly travel on official duty||Rates of conveyance allowance p.m. for journey by|
|owned motor car||other modes of conveyance|
Consolidated Travelling Allowance
A permanent monthly traveling allowance may be granted by a competent authority to any
government servant whose duties require him/her to travel extensively. 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. 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.
Conveyance Allowance FAQs
- How much exemption can I claim on conveyance allowance?
- Are there any special cases where exemption limits can be higher?
- What is the conveyance allowance provided to central government employees who travel by their own vehicle?
- What is the conveyance allowance provided to central government employees who travel through public transport?
Exemption on conveyance allowance can be claimed under Section 10(14(ii)) of the Income Tax Act. The maximum amount that can be claimed in a year is Rs.19,200 (Rs.1,600 per month).
Individuals who are blind or orthopedically handicapped can claim an exemption of Rs.3,200 per month as opposed to the regular exemption of Rs.1,600 per month.
Central government employees who travel using their own motor car are offered Rs.1,680 if the distance is between 201 and 300 km, Rs.2,520 if the distance travelled is between 301 and 450 km, Rs.2,980 if the distance travelled is between 451 and 600 km, Rs.3,646 if the distance travelled is between 601 and 800 km, and Rs.4,500 if the distance travelled is more than 800 km.
Central government employees who travel using other modes of transport will be offered Rs.556 if the distance is between 201 and 300 km, Rs.720 if the distance travelled is between 301 and 450 km, Rs.960 if the distance travelled between 451 and 600 km, Rs.1,126 if the distance travelled is between 601 and 800 km, and Rs.1,276 if the distance travelled is more than 800 km.
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News About Conveyance Allowance
Income of Cops in Karnataka Increased By Rs.2,000
The Chief Minister of Karnataka recently announced that the salary of the cops will be increased by Rs.2,000 through allowances from December 1, 2016. He assured that his government will set up a wage commission in 2017, which will focus on revising the salaries of the cops. The Government has introduced 2 types of allowances. One is called Hardship Allowance, which will amount to Rs.1,000 per month and the other is Conveyance Allowance, which will amount to Rs.600 per month. The state government has also raised the Uniform Allowance to Rs.500 per month. The Chief Minister said that the government will also implement accelerated promotion policy.
19 November 2016
CoSAAP calls for action on all pending demands
Itanagar: The Confederation of Services Associations of Arunachal Pradesh (CoSAAP) recently urged the government to approve various pending demands such as children education allowance, medical attendance rules, conveyance allowance, adhoc bonus for non-gazetted employees and implementation of LTC (according to All India regulations) and FR 56 among others.
5 April 2016
Promise of Health Minister, make Nurses put Strike on hold
Nurses from 3, 000 cities from hospitals such as PGI, GMCH-32, GMSH-16 and ESIC Hospital, under the banner of the All-India Nurses’ Federation have protested to fulfil their demands include a starting pay grade increase from Rs. 4,600 to Rs 5,400 as proposed by the 7th Pay Commission; risk allowance and non-practice allowance to be paid, payment of night allowance, and conveyance allowance and fully paid leave for childcare. The Health Minister Jagat Prakash Nadda, has assured the nurses that their demands will be looked into and would be fulfilled as well. After this assurance there was decision to postpone the strike by the All-India Nurses’ Federation.
18 March 2016
Budget 2016: Salaried Class hopeful with the New Budget
The expectations of the salaried class from Budget 2016 is high, since it has come to power this is the 3rd budget of the NDA Government. The hopes were set on the possible change in IT slabs which have not been changed for many years, home loans being cheaper, investment plans made easy, and also tax slab reliefs. The common salaried man is hoping to get a exemption limit on tax of around Rs. 3 lakhs per year, apart from other amendments to the tax laws. Section 80C of the Income Tax Act 1961, the current ax exemption limit is around Rs.1.5 lakh, HRA being increased and a deduction of at least Rs.2000 per month under Section 80GG is expected. The need of the common public is simple and easy investment options. Salaried employees are also expecting conveyance allowance to be revised Rs. 1600 per month to at least Rs, 3000 per month
2 March 2016
Upcoming Budget raises Expectations about Tax-Cut
The upcoming budget session of the parliament is raising hopes for a tax-cut in the current taxation structure. Keeping in mind the rate of inflation and the increasing cost of living, a majority of respondents in a recently conducted poll are looking forward to an increase in the exemption limit for income tax.
The poll was conducted by Assocham and around 87% of the poll respondents are advocating an increase to Rs.4 lakh from Rs.2.5 lakh for exemption of income tax. Respondents have also suggested extra incentives for savings and higher tax exemptions for education and medical expenditure by taxpayers.
Children Education Allowance, Hostel Expenditure Allowance, Conveyance Allowance & many more exemption limit should be increased.
19 February 2016