Hi,
My salary slip says conveyance allowance of rs.800/- per month where as i\'m actually spending nearly 2.5k per month towards conveyance to reach office from home. I commute through my 125cc bike and my employer says i\'m not eligible to claim the petrol expenses as it was not part of my salary. Is there any way i can claim this as conveyance expenses or motor vehicle expenses and reduce my tax outgo.
From India, Mangaluru
1My salary slip says conveyance allowance of rs.800/- per month where as i\'m actually spending nearly 2.5k per month towards conveyance to reach office from home. I commute through my 125cc bike and my employer says i\'m not eligible to claim the petrol expenses as it was not part of my salary. Is there any way i can claim this as conveyance expenses or motor vehicle expenses and reduce my tax outgo.
From India, Mangaluru
Dear Pon,
Your statement is incorrect.
Or more correctly it needs a rider to make sure juniors do not make a mistake.
1. Income Tax Act provides for an allowance of Rs. 800 per month (Rs. 9,600 per year)
2. Its an allowance that must be a part of your salary structure and designated as such in the salary sheet.
3. Its an allowance and not a reimbursement, so it has nothing to do with what you actually spend. If you were to walk from home to office, you would still be able to claim the amount of Rs. 9600 per year.
4. Business Expenses - That is conveyance related to the business of the employer (eg going from office to clients office, delivery etc) is an allowable deduction from the clients income tax dues. If the company spends that money, they will get a tax benefit, you as an employee will not be able to claim it.
5. If the company is reimbursing your expenses on travel, that amount must be at actuals, against vouchers that you give to accounts and get cash (or a transfer to your salary) and preferably not with your salary.
With reference to your particular querry, if the actual travel expense from home to office is not in your salary structure or CTC, you can not ask your company to pay it. You can negotiate for it to be a part of your next increment perhaps. And there is no way for you to claim it from income tax either. Further, you can not now ask your employer to pay you lesser salary and pay your petrol bills separately as reduction in salary is definately going to be scrutinised.
From India, Mumbai
Your statement is incorrect.
Or more correctly it needs a rider to make sure juniors do not make a mistake.
1. Income Tax Act provides for an allowance of Rs. 800 per month (Rs. 9,600 per year)
2. Its an allowance that must be a part of your salary structure and designated as such in the salary sheet.
3. Its an allowance and not a reimbursement, so it has nothing to do with what you actually spend. If you were to walk from home to office, you would still be able to claim the amount of Rs. 9600 per year.
4. Business Expenses - That is conveyance related to the business of the employer (eg going from office to clients office, delivery etc) is an allowable deduction from the clients income tax dues. If the company spends that money, they will get a tax benefit, you as an employee will not be able to claim it.
5. If the company is reimbursing your expenses on travel, that amount must be at actuals, against vouchers that you give to accounts and get cash (or a transfer to your salary) and preferably not with your salary.
With reference to your particular querry, if the actual travel expense from home to office is not in your salary structure or CTC, you can not ask your company to pay it. You can negotiate for it to be a part of your next increment perhaps. And there is no way for you to claim it from income tax either. Further, you can not now ask your employer to pay you lesser salary and pay your petrol bills separately as reduction in salary is definately going to be scrutinised.
From India, Mumbai
Banerjee,
Yes, Conveyance allowance is must in a salary structure for claiming tax exemption limited to 800/- p.m.
Do you know how the big corporates are formulating CTC structure nowadays for tax saving purposes? They provide car allowance in the CTC and the employees are claiming tax credit by showing log book signed by the immediate boss as if the travel expenses are meant for official purposes. This is happening in many organisations. I am getting car allowance but don't own a car. So I am not claiming for tax exemption except for Rs.800/- pm.
Pon
From India, Lucknow
Yes, Conveyance allowance is must in a salary structure for claiming tax exemption limited to 800/- p.m.
Do you know how the big corporates are formulating CTC structure nowadays for tax saving purposes? They provide car allowance in the CTC and the employees are claiming tax credit by showing log book signed by the immediate boss as if the travel expenses are meant for official purposes. This is happening in many organisations. I am getting car allowance but don't own a car. So I am not claiming for tax exemption except for Rs.800/- pm.
Pon
From India, Lucknow
Hi
If your company is paying car allowance with salary, then you do not get deduction under income tax.
The day the ITO asks for details, or matches claims with bank statement, the employee is going to get jacked.
(I saw at a clients scrutiny, the ITO took print out of transactions from all banks we have and showed me which ones he had marked as suspicious)
F they are giving this separately from salary, preferably against petty cash vouchers, it does not come as your income it's ok.
So what you are doing is probably the safer option and legally sustainable
From India, Mumbai
If your company is paying car allowance with salary, then you do not get deduction under income tax.
The day the ITO asks for details, or matches claims with bank statement, the employee is going to get jacked.
(I saw at a clients scrutiny, the ITO took print out of transactions from all banks we have and showed me which ones he had marked as suspicious)
F they are giving this separately from salary, preferably against petty cash vouchers, it does not come as your income it's ok.
So what you are doing is probably the safer option and legally sustainable
From India, Mumbai
Daily Up-Down from your home to office and back, is part of your job. For this purpose, company
is giving you Rs.800/-p.m as fixed conveyance allowance.
If you use a 4 wheeler for commuting to office & back, you will incur more money. Does it mean
that company has to reimburse you, the amount you spent, in addition to conveyance allowance?
Thanks
R K Nair
From India, Aizawl
is giving you Rs.800/-p.m as fixed conveyance allowance.
If you use a 4 wheeler for commuting to office & back, you will incur more money. Does it mean
that company has to reimburse you, the amount you spent, in addition to conveyance allowance?
Thanks
R K Nair
From India, Aizawl
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
ESI-Not-applica ble-on-Conveyan ce-Allowance.do c
Revision in conveyance allowance in Maharashtra from 1.10.2013.pdf