Can I claim a deduction of conveyance allowance and food allowance under the new income-tax regime?

While announcing the new income-tax regime Finance Minister has said that almost 100 exemptions stand withdrawn which includes any benefit given to employees in the form of medical allowance, conveyance allowance, special allowance, food allowance, etc.

Therefore, most of the perquisites given to employees shall become taxable under the new income-tax regime. This was because the new regime offered lower interest rates as compared to the old regime and individuals are free to choose any regime. However, now the Central Board of Direct Taxes has amended the regime by notification to prescribe certain exemptions which can be availed by employees.

According to a notification, it shall include any allowance granted to meet the cost of travel, tour or any other journey for the employer, and to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty. It shall also include any allowance granted to meet the expenditure incurred on conveyance in the performance of duties of an office or employment of profit, provided the employer does not provide free conveyance to the employee.

CBDT also mentioned that while calculating the value of perquisites, employees shall not be given any exemption in respect of free food and non-alcoholic beverage provided by the employer through paid vouchers. Therefore, just like other allowances, tax exemption on food beverages/allowance has also been withdrawn.