Claiming I-T exemption on conveyance allowance under new tax regime

Hello everyone,

Need help on the questions- Are employees allowed to claim conveyance allowance under the new tax regime? as per the CBDT if so what is the procedure?

Thank you.
Ann

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Dear Ann,

Conveyance Allow. and Medical Allow is not more exempted and is fully taxed from past 2 years.

Rather a Standard Deduction of Rs.50k now (Rs.40K till last assessment year) was allowed in lieu of above deductions.

Still, Conveyance allowance exemption for Physically Disabled employees will continued to be allowed even now.

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Yes, the government has allowed individuals under new tax regime to claim for the same, and it’s completely fine.

These include any allowance granted to meet the cost of travel on tour or on transfer, to meet the ordinary daily charges incurred.

Meanwhile, employees opting for the new scheme will be not able to avail of tax exemption for free meals, non-alcoholic beverages, or meal vouchers up to Rs 50 per meal during office hours.

Note: The rules prescribing allowances that are exempted will come into effect from April 1, 2021, and shall accordingly apply in relation to the assessment year 2021-22 and subsequent assessment years

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Hi @Dinesh,

You have mentioned - Note: The rules prescribing allowances that are exempted will come into effect from April 1, 2021, and shall accordingly apply in relation to the assessment year 2021-22 and subsequent assessment years

Did you mean assessment year 2022-23? Because if the rules are going to be in effect from April 1, 2021 then assessment year has to be 2022-23. Please confirm. Thanks.

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Hi Dinesh

Hello Dinesh

Sorry to raise this again as I am not clear on this.

Conveyance / transport allowance of Rs. 1,600/- pm paid through fixed salary was exempted u/s.10 which was later removed when standard deduction was allowed

Whether this exemption is allowed under new regime for FY 2021 & whether this is allowed for ALL such employees who receives conveyance allowance as part of their fixed salary.

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