I have a doubt, if someone can please clarify. Does the conveyance allowance paid to employees fall under statutory compliance as a social welfare measure, or is it part of the company policy as compensation given to employees for traveling for work purposes? If it falls under statutory norms, kindly provide some reference in this respect, please.
Thanks,
Bijay
From India, Vadodara
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382Thanks,
Bijay
From India, Vadodara
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There is no law in India that compels you to pay any allowance to your employees, except for the HRA Act in some states. Companies pay various allowances, including conveyance, education, medical, LTA, CCA, washing allowance, etc., to their employees as per the company's policy and not as per any law. Certain allowances paid are eligible to receive exemptions or deductions under the Income Tax law.
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From India, Mumbai
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Regards,
From India, Mumbai
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Thank you for your clarification. I just want to know one more thing related to conveyance allowance: is it true that ESIC is not applicable on conveyance allowance? Kindly help me understand this.
Thanks and regards,
Bijay
From India, Vadodara
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Thanks and regards,
Bijay
From India, Vadodara
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Dear Bijay ji, ESI is applicable on Conveyance Allowance beyond doubt.
From India, Mumbai
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From India, Mumbai
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I am aware of it. This is not the subject matter in this thread. The subject matter is: Is the Conveyance Allowance Paid to Employees Falling Under Statutory Compliance as a Social Welfare Measure or Does It Form a Part of Company Policy?
Certain allowances paid are eligible to get exemption/deduction under the Income Tax law.
As per the Income Tax Act, Conveyance Allowance of Rs. 9600/- per annum is exempted from tax.
From India, Mumbai
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Certain allowances paid are eligible to get exemption/deduction under the Income Tax law.
As per the Income Tax Act, Conveyance Allowance of Rs. 9600/- per annum is exempted from tax.
From India, Mumbai
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Dear Mr. Korgaonkar,
I have gone through the link provided by you. However, I have also read some other cases. Hence, I am literally confused because in some cases, I have seen that washing allowance is considered a special expense. It is a sum paid to defray special expenses entailed by the nature of employment, and as such, this amount does not count as wages. Therefore, ESIC is not applicable. Why is conveyance allowance not treated similarly?
Please find below lines I have retrieved from another thread on this site for your clarification:
CONVEYANCE ALLOWANCE
Conveyance allowance is paid to the employee to compensate for expenses incurred on traveling, etc. The traveling allowance or the value of any traveling concession paid to employees in the nature of conveyance allowance is neither considered wages for the purpose of coverage under Sec.2(9) nor is it treated as wages for the payment of contributions under Section 2(22) of the ESI Act.
In the case of M/s. Hyderabad Asbestos Cement Products Vs. ESIC, Punjab & Haryana High Court, Chandigarh, as well as in the case of M/s. Harihar Polyfibres, the Supreme Court has held that conveyance allowance is not considered a wage under Section 2(22) of the ESI Act.
(Earlier instructions were issued by this office vide No. P.11/13/97-Ins.IV dated 27.1.97.)
Thank you,
Bijay
From India, Vadodara
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I have gone through the link provided by you. However, I have also read some other cases. Hence, I am literally confused because in some cases, I have seen that washing allowance is considered a special expense. It is a sum paid to defray special expenses entailed by the nature of employment, and as such, this amount does not count as wages. Therefore, ESIC is not applicable. Why is conveyance allowance not treated similarly?
Please find below lines I have retrieved from another thread on this site for your clarification:
CONVEYANCE ALLOWANCE
Conveyance allowance is paid to the employee to compensate for expenses incurred on traveling, etc. The traveling allowance or the value of any traveling concession paid to employees in the nature of conveyance allowance is neither considered wages for the purpose of coverage under Sec.2(9) nor is it treated as wages for the payment of contributions under Section 2(22) of the ESI Act.
In the case of M/s. Hyderabad Asbestos Cement Products Vs. ESIC, Punjab & Haryana High Court, Chandigarh, as well as in the case of M/s. Harihar Polyfibres, the Supreme Court has held that conveyance allowance is not considered a wage under Section 2(22) of the ESI Act.
(Earlier instructions were issued by this office vide No. P.11/13/97-Ins.IV dated 27.1.97.)
Thank you,
Bijay
From India, Vadodara
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Statutory Compliance of a Industrial or Commercial Unit.xls
Statutory-compl iance.pdf
Statutory Compliance.zip