Home » Working Women » Money Planning » Leave Travel Assistance,Transport & Motor Car Allowance Leave travel assistance. Reimbursement of leave travel expenses incurred by you and your family on travel to any place in India is exempt to the extent of the actual amount spent on travel. Expenditure on hotel accommodation is not included while calculating this exemption. Further, this exemption is available only up to the cost of air travel in economy class to your destination, and is available twice in a block of four years.

Transport allowance. This is meant to compensate you for the cost incurred in commuting to your place of work. Transport allowance is exempt to the extent of Rs.800 per month, irrespective of the amount actually spent by you in commuting to your work place. The exemption is not available to you if your employer has provided you free conveyance.

Motor car allowance.

The taxable value of the perquisite is not related to the amount actually spent by the employer on acquiring, or providing, and maintaining the car.

Let us assume, for example that the company you work for has acquired a car on a hire purchase basis, and is paying a monthly instalment of Rs.8,000, Rs.3,000 to a driver, and spends Rs.5,000 on fuel, and an average of Rs.1,000 on taxes, insurance and maintenance, per month. Thus, though your company spends Rs.17,000 per month for providing you the car, the taxable perquisite value in your hands would be only Rs.1,100 per month - a reduction of Rs.15,900 per month from your taxable income.