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.

AI Summary

Employee Can Claim Conveyance Allowance Exemption Under Section 10(14) Despite Car Facility Perquisite Tax Implications An employee inquired about the possibility of claiming a conveyance allowance exemption under Section 10(14) of Rs. 800 per month, alongside a NIL perquisite value for a car facility used for commuting. The employer covers the vehicle's fuel and maintenance expenses and includes these in the salary structure. The response indicated no legal prohibition against providing both benefits. However, with the removal of the Fringe Benefit Tax (FBT) and the reintroduction of tax on perquisites, the effectiveness of such tax planning is limited.