Am I entitled to conveyance allowance if I am using cab service provided by the company?

Question

I am the only one who uses the company cab to work. Till the year 07-08, my salary slip showed conveyance allowance of 800-900Rs/month. But the Form 16 provided by my employer shows only Rs750 as conveyance allowance for the whole year. I asked for an explanation and was told that the pay slip was wrong and I was not entitled to any allowance as I was using the cab service. I am all confused.

Answer 1

This is incorrect; Transport Allowance can be a part of CTC even if the employee uses the cab facility. But you can cannot claim tax exemption under Section 10(14).

Again, this alteration can be brought about by your Firm since the CTC structure is decided by them and if you are using the company cab without any fees paid to the Firm, then to have the CTC remain the same, they can certainly deduct the transport allowance section to adjust this expense on you.

Your Firm is looking at the second idea and they are correct in doing so.