Pan Singh Dangwal
Joint Manager
Rahul Chhabra
Hr Professional

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Hi everyone, I am preparing salary structure for one of the company (year 2019)
as standard deduction is now rs 50,000
Can i keep conveyance allowance as 1600 per month and medical allowance as 1250 per month?
Or
I should not keep this conveyance allowance and medical allowance in salary structure
or
I should keep some other salary component in salary structure.
Please suggest.

Dear Rajeshwari,
Wef FY 2018, conveyance allowance and medical allowance have been removed from exemption from Income Tax. It is advisable to not include them in the structure; rather i suggest you can add Meal Cards like Edenred etc if the company is not providing free or subsidized meals, fuel reimbursement, communication reimbursement and LTA so as to make the compensation structure tax friendly.
Regards
Rahul Chhabra

Dear Rajeshwari,
The revised rate of Standard Deduction (Rs. 50k) will be applicable for the FY. 2019-2020. Upto Mar'19 the SD is Rs. 40K only.
Yes, the Medical and Conveyance allowances are not part of IT exemption, hence there is no use.
As suggested by Mr Rahul, you can frame re-imbursement policy agst Fuel, Mobile, Books and Periodical, LTA etc. But make sure there must be proper framed policy and those components should be paid separately.
If they also paid with fixed amount on monthly basis without any supporting document than it can be treated as wages.
Hope the points are cleared now. Senior and give more inputs.

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