What is conveyance allowance?

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What is conveyance allowance?
A conveyance allowance helps with public and private transport costs. (Jupiterimages/Polka Dot/Getty Images)

Conveyance allowance is a term specific to certain countries. For example, the governments and private employers of India, Pakistan and Australia make use of it. Within such countries, conveyance allowance has an official meaning and relates to the law and taxation. In the UK, the nearest equivalent to conveyance allowance is travel allowance.

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Conveyance refers to the transportation of a person or an item from one location to another. Allowance is an amount of money paid on a regular basis by a government or employer for an incurred expense. It also refers to a tax-free sum. A conveyance allowance is money someone claims or receives to cover the cost of public or private transport. Depending on the country, the person receiving this money may not have to pay tax on it up to a certain amount.

The conveyance allowance in India

In India, a conveyance allowance is sometimes part of a salary package. The allowance enables an employee to claim transport costs when engaged on official duties. Indian law does not regard a conveyance allowance as wages. This means that an employee's conveyance allowance is not liable for tax in accordance with section 2 (2) of the Government of India's Employees' State Insurance Act of 1948. A different form of conveyance allowance, administered by the government, is available for orthopaedically handicapped and blind people.

The conveyance allowance in Pakistan and Australia

In Pakistan, employees of the federal government receive a conveyance allowance to offset the cost of transport fares. In Australia, the regional government of Victoria operates a conveyance allowance to help students with the cost of travelling to school by car, bus or public transport. To be eligible for the allowance in Victoria, a student must live at least 4.8 kilometres from the closest appropriate school and must not be able to use the free school buses.

UK travel allowance

The closest the UK has to a conveyance allowance is a travel allowance. This comes in three forms. HM Revenue and Customs (HMRC) separates it into fuel and mileage allowances that people can claim when using cars and vans for business. The UK social security system incorporates travel allowances that cover expenses such as the cost of a journey to a job interview. UK employers sometimes offer travel allowances to staff that offset transport costs and make jobs more attractive.

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