The standard deduction of INR 50,000 as announced in the Finance Act, 2018 and revised at the Interim Budget 2019 is not available to physically challenged employees.Īllowed Conveyance Allowance for employees of the Central Government The conveyance allowance for handicapped people is INR 3,200 per month/ INR 38,400 per annum. There is no specific calculation or formula for calculating conveyance allowance.Ĭonveyance Allowance allowed for Handicapped people In the case of individuals who are offered a special allowance, the employees have an option to substitute INR 1,600 from the special conveyance allowance as conveyance reimbursement, claiming tax exemption on it. The same is applicable for individuals falling under the special conveyance allowance, which is entirely taxable with a higher exemption amount. This means that if the employer pays its employee’s conveyance allowance of INR 8,000 monthly (100% taxable), then also you can claim an exemption on conveyance allowance only on INR 1,600. The maximum exemption limit is INR 1,600 per month irrespective of whether the individual falls under the income tax bracket or not. The calculation of conveyance allowance is done on the employees’ basic salary. The method of calculating Conveyance Allowance Section 10 subjection 45 provides that the allowance offered to the chairman or members of UPSC is not chargeable to tax.Conveyance allowance for blind/deaf/ dumb people and orthopedically handicapped is up to INR 3,200 per month.There are two special exemption cases in conveyance allowance which are as follows – Special cases pf exemption for Conveyance Allowance Exemption of an amount up to INR 19,200 per annum is applicable under section 10(14)(ii) of the Income Tax Act. An amount paid above the limit of conveyance allowance would be chargeable to tax under the head income from salaries. The exemption can be availed by individual salaried employees. Subsection 14 of section 10 of the Income Tax Act, 1961, read with rule 2BB of Income Tax rule deals with exemption of conveyance allowance.
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