Is It Fair to Deduct Transport Allowance for Leave Days? Seeking Advice on Company Policy

Dear All, I need a small clarification. In our company, the Traveling Allowance is a part of the Monthly Gross. However, in case anybody takes leave, the company pays all the components, but only the transport allowance is deducted for the leave taken. If the Transport Allowance is part of our CTC, can the company deduct this amount? This practice has been followed for a long time under the instruction of our MD, and nobody has objected.

I need to know whether this practice is right. If not, how should I explain to the management and try to rectify it?

Traveling Allowance and Leave

Traveling allowance, conveyance allowance, or transport allowance is an allowance available to an employee to reach the office and return home. Therefore, if it is not paid for the days the employee remained on leave, whether paid leave or unpaid leave, there is no illegality. However, very often this allowance is a lump sum amount per month, and as such, it will be payable for paid leave days as well. Still, you cannot take it as a right.

CTC and Its Relevance

CTC (Cost To Company) has no legal relevance. It shall include all costs of keeping an employee in service. Therefore, it shall be an amount that the company will incur if you are present on all days.