Conveyance allowance and car facility

[ASHISH DESAI]

Can an employee claim exemption u/s 10(14) of Rs.800/-p.m.being conveyance allowance while working out his taxable salary in addition to a NIL perquisite value towards car facility for commuting between his residence to a work place & back. employer pays FBT on vehicle fuel & maintenance expenses. so, practically can employer provide both in his salary brake-up while working out CTC.

[Rama Krishana]

I think no prohibition in the law, there is no probibition for available these two. But, now after removal of FBT and reintorduction of tax on perquisits, such type of tax plannings has limited role.

AI Summary

Conveyance allowance exemption can coexist with nil car perquisite in practice, but tax regime changes curtail such planning. Whether an employee may claim a conveyance allowance exemption alongside a nil perquisite valuation for employer provided car use for commuting is addressed. The reply indicates no prohibition on claiming both concurrently, but notes that removal of fringe benefit tax and reintroduction of taxation on perquisites limits the effectiveness of such tax planning because employer paid vehicle expenses and perquisite valuation rules alter the tax treatment of the car facility.