Convenience allowance u/s 10(14)(i)

Ashish Khandelwal (Querist) 13 August 2010 This query is : Resolved
Convenience allowance u/s 10(14)(i)
Dear Experts,
According to section 10(14)(i), any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred1 in the performance of the duties of an office or employment of profit2, 3[as may be prescribed], to the extent to which such expenses are actually incurred for that purpose ;
I think either convenience allowance should be exempted extent to expenses,or taxable but employees are giving exemption of rs 800/-PM in form 16.
According to rule 2BB(2) only transport allowance has upper cap of 800/- PM.
Please advice, what can I do in this case?

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A V Vishal (Expert) 13 August 2010
Unfortunately, some of the accountants while preparing the Form 16 wrongly print transport allowance as conveyance allowance due to lack of knowledge between both the sections prescribed under the act. As discussed by you only transport allowance has a cap of Rs.800 P.M, further it also depends on how conveyance is treated to perform official duties, generally the expenses incurred by the employee on performance of the official duties are reimbursed and the head of account is debited, in the instant case the conveyance is re-imbursed and such expenditure is treated as local conveyance by most of the employers.

Ashish Khandelwal (Querist) 13 August 2010
Yes sir,
either it should be exempt or taxable. There is no rule to take exemption of Rs.800/-PM. Am i right?

A V Vishal (Expert) 13 August 2010
If it is in nature of transport allowance then there is no bar from claiming Rs800 P.M. which is a non taxable prequisite

s.subramanian (Expert) 14 August 2010
i agree with mr.vishal.

soumitra basu (Expert) 22 August 2010
In my transport allowance is nearer to conveyance allowance and exempt upto Rs. 800 per month. Rightly said by Mr. Vishal re-imbursement of conveyance expenses can not be taxable in any way.