The Government has introduced an optional new tax regime for individuals and HUF from FY 2020-21. As per the new tax regime, there are flat tax rates and deductions and exemptions are no longer available.
For instance, individuals availing of the new tax regime cannot claim exemption on HRA allowance and others.
Further, individuals availing of the new tax regime cannot get a deduction on any kind of tax-savings investment.
Under the new tax regime, individuals can claim the exemptions mentioned below -
- Allowance to cover conveyance expenses spent while performing office duties or duties related to the employment of profit. Here, employers must not offer free conveyance to their employees. In short, this allowance is inclusive of travelling expenses of employees that might have incurred while on official duty.
- Allowance provided by an employer for managing the cost of travelling expenses incurred during tour or transfer. Here, allowance usually involves costs such as rail fare and other transportation expenses.
- Allowance provided by an employer to employees for covering daily expenditures while being absent from their usual place of work. The allowance is available while on a tour and for a certain time of transfer-related journey. This type of allowance includes expenses related to food and other daily expenses.
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For salaried individuals who are blind or deaf or dumb or orthopedically handicapped with disability of lower extremities can avail travel allowance exemptions of up to ₹ 3,200 per month. This allowance is available for covering commuting expenditure from home to the workplace.
The details of travel allowance might confuse those who have little knowledge about Conveyance Allowance. Let’s clear the fog of confusion.
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