For employees who choose the old tax regime and have Conveyance Allowance configured in their salary structure, Zoho Payroll automatically applies a monthly exemption of Rs 1,600 when computing taxable income for TDS. The taxable portion (amount above Rs 1,600) is included in monthly TDS computation. No reimbursement claim or bill submission is required for this exemption.
These two terms are sometimes used interchangeably, but they have different contexts. Conveyance Allowance is a salary component for commuting. Transport Allowance (Sec 10(14)) has its own rules for physically handicapped employees. Zoho Payroll supports both as separate components with distinct tax treatments.
Employees who opt for the new income tax regime cannot claim the Rs 1,600 monthly exemption. Zoho Payroll handles this by checking the regime selected in the employee’s investment declaration. If new regime is selected, the full Conveyance Allowance is treated as taxable income in TDS computation.
Conveyance Allowance is a salary component in Zoho Payroll that compensates employees for daily commuting costs. Under the old tax regime, up to Rs 1,600 per month is automatically exempted from TDS computation by Zoho Payroll. The new regime offers no such exemption.
Yes. Zoho Payroll checks the employee’s selected tax regime and applies the Rs 1,600 monthly conveyance exemption automatically for old-regime employees when calculating monthly TDS. No manual adjustment is needed.
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