Setting limits for conveyance allowance


What are set limits for conveyance allowance and its allowance calculations? Any scenarios where we need to allow higher limits?

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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.

There is no limit on the amount of conveyance allowance a company can offer to its employees.

The tax exemption limit for conveyance allowance is set at Rs. 1,600 per month, irrespective of the tax bracket a person falls under. If the individual is given a special allowance, which is fully taxable, then he or she can substitute Rs. 1,600 from it as conveyance allowance and claim tax exemption on it.

There is a limit on the amount of tax exemption under the Income Tax Act. Under Section 10(14) of the Income Tax Act and Rule 2BB of Income Tax Rules, the conveyance allowance exemption limit is Rs. 1,600 per month (or Rs. 19,200 a year)

The special exemption cases with respect to Conveyance Allowance.
For an individual who is orthopedically handicapped/ blind/ deaf/ dumb, the exemption limit is INR 3,200 per month.
As per Section 10(45) of the Income Tax Act, the Conveyance Allowance that is offered to the members of the Union Public Service Commission (UPSC) will not attract any taxes.

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