Can I get TDS rebate on conveyance allowance ?

The following perquisites are not taxable either under the executive instructions of the Central Board of Direct Taxes or by virtue of specific provision in the Act/Rules :

• Re-imbursement of expenses in respect of car (which is owned by employee and used for personal and official purpose) (amount not taxable is up to Rs. 1,200 per month for car having engine capacity of not more than 1600cc, Rs. 1,600 per month for car of above 1600cc and Rs. 600 per month for driver).
• Conveyance facility provided to an employee to cover the journey between office and residence.

B)    Transport allowance

Transport allowance for traveling from residence to office is exempt up to Rs 800 per month.

The perquisite of free means vary widely from uniform canteen food, coupons etc. to lavish hotel meals.  The feature of free meals as a staff welfare measure has been recognised and is exempted upto Rs.35 for each meal by an earlier notification.  The new rule allows expenditure on food upto Rs.50/-.  Such free or subsidised meal should however be provided at office premises or through non transferable vouchers means for only meals during working hours.  These vouchers should be provided by employers encashable only at eating joints.  Tea and snacks during working hours are also not charged as perquisite.  Also arrangements for meals in ‘remote areas’ and offshore installations shall be exempt.  The definition of remote area shall be the same as that associated with the accommodation sub-rule one located at least 40 kilometres away from a town having a population not exceeding 20,000 as per the last published all India census.

Thanks for the  reply.

My questions is that 20% of my  gross salary is being deducted as conveyance allowance whereas actual cost of conveyance is far below than that. Not only this but the TDS is also being deducted on the Gross salary. Which includes the conveyance allowance as well.

So far TDS was no being deducted on this conveyance allowance and therefore I didn't care. But now it matters for me as I have to pay extra TDS.

Kindly suggest me how I can avoid this extra expenses.

Thanks and Regards,

Anoop Prasad

Deat Mr Prasad

I am unable to understand the concept of deduction of conveyance allowance. An allowance is meant to paid to the employee and not deducted.

Please confirm whether, the company deducts the said amounts for company provided conveyance facility and company canteen facilities.  Then these are charges recovered by the Company from your CTC for certain facilities provided by company to you. Ideally these do not form part of taxable salary in such case.

Yes. Conveyance and Canteen facilities are provided by the company itself. And company is including these facilities in the salary and dedcuting the TDS on this amount as well.

Anoop

It  is unfortunate that the Company is including Conveyance and Canteen facility expenses in your taxable salary and making you liable to pay tax on the same.

The expenses incurred by Company on conveyance of employees from office to residence and other official travelling is not counted in perk value. The company may recover this amount from employee's CTC as per employment contract but in no case it should be treated as taxable salary.

Similarly amount spent by company for free meals/ snacks etc at workplace is also exempt from perk value upto Rs 50 per meal. So if you have 26 working days, such expense upto Rs 1300/- is not to be included in taxable salary.

Please take up the matter with accounts/ paybill section of your company.

Thanks for the suggetion.

I'll take this matter to Accounts deptt. of the company. 

Can I get tax rebate on the amount paid in last months, while filling my Income Tax Return?

Anoop Prasad

Kindly note that TDS is nothing but tax paid on your behalf and same is credited against your gross tax liability.

So TDS deducted from April 2010 onwards is tax paid on your behalf for financial year 2010-11 (Assessment year 2011-12). You will avail credit of same against your tax liability for this year and any amount deducted in excess can be claimed as refund in your return of income.

So once the matter of exclusion of conveyanace and canteen deductions is sorted out, the company can deduct lesser TDS in coming months as the taxable salary for the entire year stands reduced.

For last year, i.e. FY 2009-10 (AY 2010-11) for which return to be filed before 31st July, 2010, you can ask company to issue you a revised TDS certificate showing lower adjusted salary income. As the TDS had already been deducted and deposited with government, you can claim excess TDs as refund in your return.