Taxability of Conveyance Allowance

[Ashish Gupta]

The conveyance allowance of Rs. 800 P. M. is tax free in the hand of employees and if the company provide car/conveyance facility to the employees then what will be the taxability of conveyance allowance of Rs. 800 PM. in case: i. Company provides car to the employees and add the value of perquisites of car in the salary and deduct TDS and ii. Company provides conveyance facility through company bus to the employees and do not charge any amount from employees.

AI Summary

Taxability of Conveyance Allowance: Exemptions Under Rule 2BB Explained in Different Scenarios A discussion on the taxability of a conveyance allowance of Rs. 800 per month explores two scenarios: when a company provides a car and adds its value as a perquisite in the salary, and when a company provides a bus service without charging employees. One response clarifies that if a free conveyance facility is provided, no transport allowance is exempt under Rule 2BB. However, if the car's value is included in the salary, an exemption up to Rs. 800 is allowed. Another response questions the applicability of surcharge and cess on TDS for non-salary cases.