What is Conveyance allowance? #
Conveyance allowance is paid to meet the expenses in the performance of official duties during working hours. Employees’ cost during official travel expenses on daily basis is called conveyance expenses.
Employees are required to travel between places for official duty during working hours for performing the assigned task. During the travel, they are required to spend on fuel expenses, cab expenses, bus fare, train fare, parking expenses, etc., which are called conveyance expenses, and to meet the same conveyance allowance is paid.
How is the conveyance allowance exemption calculated? #
Conveyance allowance paid as a salary component is exempted from the taxable income of the employee to the extent of the actual expenses incurred. In other words, the conveyance allowance received more than the actual conveyance expenses is taxable income.
Conveyance allowance is set up as one of the default allowances in OfficePortal with a flat amount of Rs. 1600 per month and the amount can be changed as per the user’s requirement.