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Conveyance Allowance & Petrol Reimbursement

hilmesh1611 Started The Discussion:

Dear All, Can we give certain Sr. Employees a standard Conveyance allowance of 800 & then 1500/- as petrol reimbursement against bill? Will this create any issue or it is OK to give.

Dear Mr. Prashant, It was to be an added incentive. and will only be given against petrol bills. Is it possible? Thanks

If the 1500/- is given against petrol bills then i dont think it will be considered as taxable income. However it s suggested to prepare reimbursement slip apart from Salary Slip where all the reimbursements (the amount paid against bills).

Arti

pon1965 - Senior Member
There is difference bet’n reimbursement and incentive. Read my post wherein I have stated if reflected in the payslip. Reimbursements do not find place in payslip. Pon

Dear All,

What i meant by incentive was that it will be a attraction to my seniors that apart from the usual travel allowance they have the facility of reimbursing 1000 or 1500 Rs/month against proper Petrol bills. This reimbursement will not be reflected in the salary slip and will in separate reimbursement slips.
So With my explanation and your answers i will take it as a Yes, that i can give conveyance allowance which will be reflecting in the salary slip. and petrol reimbursement which will in separate slip and only payable against bills.
Thanks.

faraz_smn - 
respected sir, please give the proper procedure of settlement of t.a and d.a according to structure like top to bottom

vkokamthankar - Contributing Member
  • The way you have explained, it is nothing but additional income to employees. You are paying Rs. 800 as Allowance and some more amount as Petrol Reimbursement. Hence though you are calling it reimbursement it is nothing but a allowance and it needs to be taxed.
  • Please consult your Tax Consultant before finalizing this arrangement. He may push you to the right side of law by doing some jugglery.
  • Petrol Reimbursement paid for commuting between home and office can not be Tax Free. You may show this as Reimbursement Of Petrol Expenses for official work like visiting vendors, suppliers, customers etc. But such Petrol Reimbursement Claim needs to be supported by statement containing date-wise details such as place visited, Kilometers traveled, purpose of visit etc. and it can not be uniform fixed amount everymonth, as it will logically depend upon actual travelling.
Quote:
Originally Posted by hilmesh1611 View Post
Dear All,

What i meant by incentive was that it will be a attraction to my seniors that apart from the usual travel allowance they have the facility of reimbursing 1000 or 1500 Rs/month against proper Petrol bills. This reimbursement will not be reflected in the salary slip and will in separate reimbursement slips.
So With my explanation and your answers i will take it as a Yes, that i can give conveyance allowance which will be reflecting in the salary slip. and petrol reimbursement which will in separate slip and only payable against bills.
Thanks.

Krishan Kapoor - Contributing Member
1. As per Income Tax rules payment of Rs.800/- per month as conveyance allowance with salary is exempted from Income Tax.
2. Employer can give any amount to employee as reimbursement, subject to certain conditions and company policies.
if the amount is given as Allowance it will be taxable.
Best wishes,

cvh - Contributing Member
Quote:
Originally Posted by hilmesh1611 View Post
Dear All,
Can we give certain Sr. Employees a standard Conveyance allowance of 800 & then 1500/- as petrol reimbursement against bill?
Will this create any issue or it is OK to give.
Dear Hilmesh

Conveyance allowance of Rs 800/- per month is exempted from Income Tax. If your senior employee is entitled for a vehicle facility as per policy, you may reimburse petrol expenses. Then you should not pay conveyance allowance .Both these reimbursements can not be availed by an employee.

Chandrakant

I would like to ask that under which section can we claim the motor vehicle fuel and maintainance expenses?
Also can a person claim such exemption when the vehicle is registered in the name of his father when the registered owner of the vehicle (the father in this case) is not claiming such exemption but is only claiming exemption of rs.800pm as conveyance.

Thank you in advance.

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