Conveyance allowance on tour exempted under new tax

New Delhi, June 28: The Centre has allowed individuals to claim I-T exemption on conveyance allowance received from employers in the new lower tax regime .

The Central Board of Direct Taxes (CBDT) has now amended Income Tax rules to prescribe certain exemptions for the employees.

Under this, tax exemption is granted on any allowance granted to meet the cost of travel on tour or on transfer.

It also includes exemption for any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit, provided that free conveyance is not provided by the employer.

The CBDT has further clarified that while determining value of perquisites, no exemption will be available in respect of free food and non-alcoholic beverage provided by employer through paid voucher.

Further, blind, deaf and dumb or orthopedically handicap employees can also claim ad-hoc exemption of transport allowance of Rs 3,200 per month while computing salaried income.

Offering an optional lower rate of income tax to individuals, the Budget 2020-21 proposed a new optional tax regime under section 115BAC of I-T Act for individuals willing to forego certain exemptions.