Daily Conveyance Allowance

Share
Share This Thread
  1. Ankit Daruka

    Ankit Daruka New Member

    Our Co. are providing daily conveyance allowance to director's i.e apart from Salary, which is accounted on companies conveyance expenses.
    Can any one explain me how to account it and whether it will reflect to director's salary in term of Perquisite and Conveyance.
     
  2. As per the provisions of sec 197 , Allowances shall form part of managerial remuneration provided the same is not limited to reimbursement of actual expenses only.

    so you have to account the same along with directors salary.

    for perquisites, in case of adequacy of profits - entire value of perquisites as per IT Act &
    in case of inadequacy of profits - taxable value of perquisites as per IT Act will have to be considered. (otherthan expatriate managerial personnel)

    for expatriate managerial personnel following shall not be considered for the purpose of remuneration
    - children education allowance
    - holiday package staying outside/family staying abroad
    - leave travel concession
     
  3. Ankit Daruka

    Ankit Daruka New Member

    Actually till now we are accounting it as company expenses i.e in companies daily conveyance to sales and other staff. Is it wrong accounting.
     
  4. ZED

    ZED Well-Known Member

    Yes, the practice is wrong both as per accountancy and taxation point of view.
    It forms part of salary.
     
Draft saved Draft deleted