Conveyance Allowance

Conveyance Allowance, more precisely the fixed conveyance allowance, is a monthly allowance granted under Supplementary Rule 25 to a central government employee who maintains a personal vehicle and travels extensively on local official duty in it. For a journey by own motor car it runs from Rs. 2,100 a month, for 201 to 300 km of average monthly official travel, to Rs. 5,625 a month for more than 800 km. For a scooter, motorcycle or moped it runs from Rs. 695 to Rs. 1,595. Every one of those figures is the base rate in Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017, as corrected on 13 December 2023, plus the single 25% step that paragraph 2 of the order triggered when dearness allowance reached 50% on 1 January 2024.

Two things about the allowance are commonly stated wrongly. The Seventh Central Pay Commission did not raise it: paragraph 8.15.9 of the report held that the demands lacked merit and that status quo should be maintained, and the rupee figures in the 2017 order are the same figures the Commission printed at paragraph 8.15.7 as the existing ones. And there is a floor: the lowest slab is 201 to 300 km a month, not zero to 300 km, so an employee whose official travel averages 150 km a month draws nothing under this head.

This article sets out the current rates and the arithmetic behind them, the SR-25 basis and where the allowance sits among the five kinds of travelling allowance, who is eligible, what the Seventh Central Pay Commission actually decided, the corrigendum of 13 December 2023, the escalation clause and the one step it has produced, the bar on drawing mileage or daily allowance for the same journey, the position during leave, joining time and temporary transfer, the difference from transport allowance and travelling allowance, sanction and administration, the income-tax exemption that survives the default new regime, and the effect on pension.

The allowance is narrow by design. It is not the commute payment every employee draws, and it is not the tour and transfer reimbursement. It is the payment for a medical officer who drives to see patients at home, or an inspector who rides a motorcycle on frequent field visits, keeping and running a personal vehicle for the government’s work.

Current rates

For a journey by own motor car the fixed conveyance allowance is Rs. 2,100 a month for 201 to 300 km of average monthly official travel, Rs. 3,150 for 301 to 450 km, Rs. 3,881.25 for 451 to 600 km, Rs. 4,557.50 for 601 to 800 km and Rs. 5,625 for more than 800 km. For other modes of conveyance it is Rs. 695, Rs. 900, Rs. 1,200, Rs. 1,407.50 and Rs. 1,595 across the same five slabs.

Those are the base rates in the table appended to Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017, as corrected for the 451 to 600 km motor-car slab by the corrigendum of 13 December 2023, each raised by the 25% step that paragraph 2 of the order triggered when dearness allowance reached 50% on 1 January 2024.

Three of the ten stepped figures carry paise, because a 25% enhancement of an odd base does not always land on a whole rupee. The 2017 order prescribes no rounding rule and the Department of Expenditure has issued no separate order re-notifying the stepped table, so the drawing and disbursing officer computes the figure from paragraph 2 of the order itself.

An employee whose duties take them 400 km a month by car falls in the second slab and draws Rs. 3,150. One who covers the same 400 km by scooter draws Rs. 900. One who averages 180 km a month draws nothing under this head, because the table starts at 201 km.

The SR-25 basis

Supplementary Rule 25 is the source of the allowance, and it is one of five kinds of travelling allowance. Supplementary Rule 21 lists them: permanent travelling allowance, conveyance or horse allowance, mileage allowance, daily allowance, and the actual cost of travelling. The conveyance allowance is the second of those, and the horse limb is the historical remnant that explains why the rules still distinguish an allowance carrying an obligation to maintain an animal from one that does not.

The rule reads that a competent authority may grant, on such conditions as it thinks fit to impose, a monthly conveyance or horse allowance to any government servant who is required to travel extensively at or within a short distance from his headquarters under conditions which do not render him eligible for daily allowance. Three elements of that text do the work. The grant is discretionary and conditional, not an entitlement that follows from owning a car. The travel must be extensive and local, at or near headquarters. And the conditions must be such that daily allowance is not admissible, which is what separates this allowance from the tour payments.

Supplementary Rule 22 sets up the contrast that is easiest to confuse with it. A permanent monthly travelling allowance under that rule is granted to a government servant whose duties require extensive travel, and is granted in lieu of all other forms of travelling allowance for journeys within his sphere of duty. The conveyance allowance under Supplementary Rule 25 is not in lieu of all other forms; Supplementary Rule 26 expressly allows it in addition to any other travelling allowance admissible under the rules, subject to one proviso set out below.

Paragraph 3 of Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017 keeps this framework alive alongside the rate table: the conditions and provisions mentioned in SR 25 continue to apply. The 2017 order is a rate order layered on a standing rule, which is why the allowance is still named by its rule number rather than by a pay-commission label.

Who is eligible

Two groups draw the fixed conveyance allowance, and paragraph 8.15.7 of the Report of the Seventh Central Pay Commission names both. It is paid to doctors for visits to hospitals and dispensaries outside normal duty hours as well as for making domiciliary visits. It is also paid to those employees who maintain their own motor car, scooter, motorcycle or moped and have to undertake frequent journeys on official business in their conveyance.

The medical limb is the older and better known of the two. A medical officer who must reach a hospital at odd hours, or visit a patient at home, in a personal vehicle is the classic recipient, and the allowance sits alongside the other service benefits of the medical cadres such as the non-practising allowance drawn by officers of the Central Health Service.

The second limb reaches inspectors, surveyors, engineers and field staff whose duties require constant local travel. Two conditions bind it. The employee must actually maintain the vehicle, so the allowance does not reach someone who neither owns nor runs one. And the official travel must be frequent enough to reach the 201 km monthly floor of the lowest slab, so occasional official journeys do not qualify and are met by the ordinary travelling allowance instead.

Underneath both limbs sits the Supplementary Rule 25 test, which is a test about the character of the travel rather than about the grade or cadre of the employee: travel extensive, at or within a short distance from headquarters, under conditions which do not render the government servant eligible for daily allowance.

What the Seventh Central Pay Commission decided

The Seventh Central Pay Commission left the conveyance allowance rates exactly where it found them. Paragraph 8.15.9 of its report records the reasoning in three sentences: the demands lack merit, the present rates of the allowance are adequate, and accordingly status quo may be maintained. The summary table of allowances in the report enters the outcome at serial number 38 as “Retained. Status Quo to be maintained.”

The demand the Commission was rejecting is set out at paragraph 8.15.8: that the allowance be fully indexed with dearness allowance, as in the case of transport allowance. The Commission declined that, and instead attached the coarser escalator in the same paragraph 8.15.9, that the allowance will go up by 25% each time dearness allowance rises by 50%.

The arithmetic proves the point. The table at paragraph 8.15.7, printed in November 2015 as the existing rates, reads 1680, 2520, 2980, 3646 and 4500 for a motor car and 556, 720, 960, 1126 and 1276 for other modes. The table in Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017 carries the identical ten figures. The 2017 order superseded Office Memorandum No. 19039/2/2008-E.IV dated 23 September 2008 and was signed by Annie George Mathew, Joint Secretary to the Government of India, with effect from 1 July 2017, but what it changed was the escalation clause, not the rupee amounts.

This is a different fate from the neighbouring small allowance in the same file series. The Commission recommended abolishing the cycle allowance at paragraph 8.15.11 as meagre and outdated; the government declined that recommendation and instead doubled the rate from Rs. 90 to Rs. 180 a month through Department of Expenditure Office Memorandum F. No. 19039/4/2008-E.IV dated 14 July 2017. The conveyance allowance was retained with its figures untouched; the cycle allowance was retained against a recommendation to abolish it, and doubled. Neither was revised in the ordinary pay-commission sense. The wider pattern of what the Commission kept, merged and ended is set out in abolished allowances under the 7th CPC.

The corrigendum of 13 December 2023

One cell of the 2017 table has been corrected since. A corrigendum issued under F. No. 19039/3/2017-E.IV on 13 December 2023, signed by A. Bandyopadhyay, Under Secretary to the Government of India, directed that the rate of fixed conveyance allowance for a journey by own motor car in column 2 at row 3, for the distance range 451 to 600 km, be read as Rs. 3,105 instead of Rs. 2,980.

Nothing else moved. The other four motor-car slabs and all five other-modes figures stand as issued in July 2017. The Department of Expenditure listed the order on its circulars page on 14 December 2023 under the title “Rate of Conveyance Allowance, Modification reg.”

The correction matters more than its Rs. 125 size suggests, because the 25% step multiplies it. On the uncorrected Rs. 2,980 the stepped figure would be Rs. 3,725 a month; on the corrected Rs. 3,105 it is Rs. 3,881.25. An employee in the 451 to 600 km motor-car slab drawing the older figure is short by Rs. 156.25 a month.

Escalation with dearness allowance

The rates rise in a single 25% step at each 50 percentage point gain in dearness allowance, and only one step has occurred. Paragraph 2 of Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017 provides that “These rates shall automatically increase by 25% whenever the Dearness Allowance payable on the revised pay structure goes up by 50%.”

Dearness allowance reached 50% with effect from 1 January 2024, under Office Memorandum No. 1/1/2024-E-II(B) dated 12 March 2024, which triggered the first step. It stands at 60% from 1 January 2026 under Office Memorandum No. 1/1(i)/2026-E.II(B) dated 22 April 2026, which is well short of the 100% the second step requires. So the base rates in the 2017 order, as corrected in December 2023, currently stand enhanced once.

The clause is self-executing, in the way the house rent allowance escalation in Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 is. No separate order re-notifies the conveyance allowance at the stepped figures, which is why the current rates have to be computed from paragraph 2 rather than looked up in a later order.

This is a coarser escalation than the transport allowance enjoys, where the fixed figure carries dearness allowance at the full current rate and so moves at every revision, twice a year. Between January 2024 and the 100% threshold the conveyance allowance is frozen in rupee terms while transport allowance keeps climbing. That gap is precisely what the demand recorded at paragraph 8.15.8 of the Seventh Central Pay Commission report was aimed at, and precisely what paragraph 8.15.9 declined to close.

Drawing it alongside other travelling allowances

The conveyance allowance may be drawn in addition to other travelling allowance, with one bar that catches employees out. Supplementary Rule 26 provides that a conveyance or horse allowance is drawn all the year round, is not forfeited during absence from headquarters, and may be drawn in addition to any other travelling allowance admissible under the rules.

The proviso to that rule carries the bar. A government servant in receipt of a conveyance allowance specifically granted for the upkeep of a motor car or motor cycle shall not draw mileage or daily allowance for a journey by that motor car or motor cycle, except on such conditions as the authority which sanctions the conveyance allowance may prescribe.

The practical effect is a line drawn by mode, not by journey. An officer drawing the fixed conveyance allowance for the upkeep of a car who travels on tour by rail or by air draws the ordinary travelling allowance for that tour, including the daily allowance on tour, without any conflict. The same officer who drives that same car to the tour station cannot claim road mileage for it, because the fixed allowance is already meeting the running cost of the vehicle. The Supplementary Rule 25 test itself points the same way: the allowance is granted where the conditions do not render the government servant eligible for daily allowance.

Leave, joining time and temporary transfer

A vehicle conveyance allowance is not admissible during leave, temporary transfer or joining time, but it is not lost merely by being away from headquarters. Two rules divide the ground.

Supplementary Rule 27 provides that a conveyance or horse allowance may not be drawn during joining time or holidays suffixed to joining time, and that its drawal during leave or temporary transfer is governed by Supplementary Rules 7 and 7-A. Supplementary Rule 7-A then provides that a conveyance allowance to which the obligation of maintaining a horse or other animal is not attached is not admissible during leave or temporary transfer or holidays prefixed or suffixed to leave. Every motor car, scooter, motorcycle and moped allowance falls in that category, so for a modern recipient the bar during leave is complete. Supplementary Rule 7, which allows drawal on certificates from the sanctioning authority and the government servant, applies only where the grant carries an obligation to maintain an animal.

Absence from headquarters is the opposite case. Supplementary Rule 26 states that the allowance is drawn all the year round and is not forfeited during absence from headquarters, unless the sanctioning authority otherwise directs. A recipient on tour therefore continues to draw it.

The four-month line defines temporary transfer. Supplementary Rule 6 treats a transfer as temporary where it is expressed to be for a period not exceeding four months, and includes deputation within that. Where the temporary duty is later extended beyond four months in all, the title to the compensatory allowance remains intact up to the date of the order of extension, and joining time may be added to the four-month period. A deputation longer than four months is not a temporary transfer for this purpose, and the allowance in the parent post ends rather than being suspended.

Conveyance, transport and travelling allowance compared

Three central government payments cover travel and they meet three different costs, which is the single most common source of confusion on a pay slip. Conveyance allowance meets the running cost of a personal vehicle used for frequent local official travel. Transport allowance meets the cost of the daily commute between home and office. Travelling allowance reimburses a specific official journey away from headquarters.

An employee can draw all three in the same month, because they meet different costs: a medical officer may draw transport allowance for the commute, conveyance allowance for domiciliary visits, and travelling allowance for an official tour to a conference. The one overlap the rules forbid is narrower than “no double payment”: under the proviso to Supplementary Rule 26 the conveyance allowance holder cannot also claim mileage or daily allowance for a journey performed by the very car or motorcycle the allowance maintains. Travelling allowance on transfer, including the composite transfer grant and the transport of personal effects, is untouched by the conveyance allowance.

Sanction and administration

The allowance is sanctioned by a competent authority, on such conditions as it thinks fit to impose, under Supplementary Rule 25, and paragraph 3 of the 19 July 2017 order keeps those conditions in force. It is therefore an administrative grant on the facts of the post, not an entitlement that follows automatically from a distance figure.

The slab follows the average monthly official travel, so the sanction is reviewable. A sustained fall in official travel moves the employee to a lower slab, and a fall below the 201 km floor takes the allowance away altogether. The controlling officer’s certification of the extent of official travel is the record on which the slab rests, and the allowance ends when the duty that justified it ends or the employee stops maintaining the vehicle.

Because the fixed monthly sum stands in place of individual local journey claims, the recipient does not file a bill for each short official trip in the vehicle while drawing it. Long-distance official tours away from the headquarters station remain outside the allowance and are met by the ordinary travelling allowance.

The 19 July 2017 order reaches the Audit and Accounts Department expressly. Paragraph 5 records that in so far as the staff serving in that department are concerned, the orders issue in consultation with the Comptroller and Auditor General of India. The order is addressed to all Ministries and Departments of the Government of India on the standard distribution list, and endorsed to the Comptroller and Auditor General and the Union Public Service Commission on the standard endorsement list.

Income tax

Conveyance allowance granted to meet the expenditure incurred on conveyance in the performance of official duties is exempt from income tax to the extent actually spent, and the exemption survives the default new regime. That last point is what distinguishes it from almost every other allowance exemption a central government employee once claimed.

For the tax year 2026-27 the prescribed-allowance exemptions sit in the Table in Schedule III to the Income-tax Act, 2025 (Act No. 30 of 2025), read with the Income-tax Rules, 2026 notified by Central Board of Direct Taxes Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026, which replaced the Income-tax Rules, 1962 with effect from 1 April 2026. Rule 280 of the 2026 Rules prescribes those allowances, and the conveyance clause is one of the short list that a person taxed under Section 202, the default regime, keeps, alongside the allowance for travel on tour or transfer, the daily allowance, and the transport allowance for a differently abled employee.

The return for the financial year 2025-26, filed during 2026, is still governed by the repealed statute. There the exemption is Section 10(14)(i) of the Income-tax Act, 1961 read with Rule 2BB(1)(c) of the Income-tax Rules, 1962, and its survival under the new regime rests on Rule 2BB(3), inserted by Central Board of Direct Taxes Notification No. 38/2020 dated 26 June 2020, G.S.R. 415(E), and then substituted by Notification No. 43/2023 dated 21 June 2023, G.S.R. 452(E), which retained clauses (a), (b) and (c) of Rule 2BB(1) together with serial number 11 of the table under sub-rule (2). Clause (c) is the conveyance allowance. The substance carried across the change of statute unaltered.

The contrast with the commute payment is sharp. The transport allowance for commuting had its own exemption of Rs. 1,600 a month, which was withdrawn and subsumed into the standard deduction with effect from the financial year 2018-19, so the commute allowance is now taxable while the standard deduction is given in its place. The conveyance allowance keeps its exemption because it is not a commute payment. The exemption is capped by expenditure rather than by a rupee ceiling, so an employee drawing Rs. 5,625 a month who spends less than that on official travel is exempt only to the extent spent. Income tax for government employees sets out how the salary heads and their exemptions combine.

Pension, house rent allowance and pension contributions

Conveyance allowance does not count as emoluments for pension or retirement gratuity. It is a compensatory allowance meeting the running cost of a vehicle used on duty, not a part of pay, so it falls outside the emoluments definition that fixes the pension of a retiring employee.

It is equally outside the pay figure that drives the other allowances. House rent allowance, dearness allowance and the employee and employer contributions to the National Pension System are all computed on basic pay, meaning the cell value from the employee’s pay matrix level and stage, with dearness allowance added where the rule so provides. The conveyance allowance enters none of those bases. It raises take-home pay while it is drawn, at Rs. 2,100 to Rs. 5,625 a month for a motor car, and leaves the pension untouched.

Bearing on the 8th Central Pay Commission

No conveyance allowance figure can be stated for the Eighth Central Pay Commission, because it has not reported. Until it does and the government accepts its recommendations, the position is the SR-25 slab table in Department of Expenditure Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017, as corrected on 13 December 2023, enhanced by the single 25% step that dearness allowance crossing 50% on 1 January 2024 produced.

What is on the record is the history of the demand. Paragraph 8.15.8 of the Seventh Central Pay Commission report recorded demands to index the allowance fully with dearness allowance, in the manner of transport allowance, and paragraph 8.15.9 held that those demands lacked merit. An allowance whose rupee figures have not moved since the 2008 order, and which has gained a single 25% step in the eighteen years since, is an obvious candidate for that demand to be renewed before the 8th Central Pay Commission. Nothing on the public record establishes that it has been.

Related Articles

• Transport allowance
• Travelling allowance
• Daily allowance on tour
• Composite Transfer Grant
• Cycle allowance
• Deputation allowance
• Non-Practising Allowance
• Central Health Service
• Fixed Medical Allowance
• Abolished allowances under the 7th CPC
• Allowances for central government employees
• House rent allowance
• Dearness allowance
• Basic pay
• Pay matrix
• Section 10(14) exemption
• Income-tax Act, 2025
• Standard deduction
• Income tax for government employees
• National Pension System
• Take-home salary for central government employees
• Department of Expenditure
• 7th Central Pay Commission
• 8th Central Pay Commission
• Central government employees in India

External references

• Department of Expenditure
• Department of Expenditure, conveyance allowance order of 19 July 2017
• Department of Expenditure, rate of conveyance allowance, modification
• Report of the Seventh Central Pay Commission
• Department of Personnel and Training
• Income Tax Department

References

1. Ministry of Finance, Department of Expenditure, Office Memorandum No. 19039/3/2017-E.IV dated 19 July 2017, “Implementation of the recommendation of the Seventh Central Pay Commission, Conveyance Allowance”, signed by Annie George Mathew, Joint Secretary (table of rates of fixed conveyance allowance admissible under SR-25 for 201 to 300, 301 to 450, 451 to 600, 601 to 800 and above 800 km of average monthly travel on official duty; paragraph 2 automatic 25% increase whenever dearness allowance goes up by 50%; paragraph 3 continuance of the conditions of SR 25; paragraph 4 effective 1 July 2017; paragraph 5 consultation with the Comptroller and Auditor General for Audit and Accounts staff; in supersession of Office Memorandum No. 19039/2/2008-E.IV dated 23 September 2008).
2. Ministry of Finance, Department of Expenditure, Corrigendum under F. No. 19039/3/2017-E.IV dated 13 December 2023, signed by A. Bandyopadhyay, Under Secretary (rate of fixed conveyance allowance for journey by own motor car in column 2 at row 3, distance range 451 to 600 km, to be read as Rs. 3,105 instead of Rs. 2,980).
3. Supplementary Rules, Government of India: SR 6 (temporary transfer of not more than four months, including deputation), SR 7 and SR 7-A (drawal of a conveyance allowance during leave and temporary transfer), SR 21 (the five kinds of travelling allowance), SR 22 (permanent travelling allowance), SR 25 (grant of a monthly conveyance or horse allowance), SR 26 (drawn all the year round, not forfeited during absence from headquarters, and the proviso barring mileage or daily allowance for a journey by the vehicle maintained) and SR 27 (joining time and holidays suffixed to joining time).
4. Report of the Seventh Central Pay Commission, November 2015, paragraphs 8.15.7 to 8.15.9 (eligibility of doctors and of employees maintaining their own vehicle, the existing rate table, the demands for full indexation with dearness allowance, and the finding that the demands lack merit and status quo may be maintained), paragraph 8.15.11 (cycle allowance), and the summary table of allowances at serial number 38.
5. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1/1/2024-E-II(B) dated 12 March 2024 (dearness allowance raised to 50% with effect from 1 January 2024) and Office Memorandum No. 1/1(i)/2026-E.II(B) dated 22 April 2026 (dearness allowance at 60% with effect from 1 January 2026).
6. Ministry of Finance, Department of Expenditure, Office Memorandum F. No. 19039/4/2008-E.IV dated 14 July 2017 (cycle allowance retained and raised from Rs. 90 to Rs. 180 a month with effect from 1 July 2017).
7. Income-tax Act, 2025 (Act No. 30 of 2025), in force from 1 April 2026, Schedule III (prescribed allowances) and Section 202 (the default regime); Central Board of Direct Taxes Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026 notifying the Income-tax Rules, 2026 with effect from 1 April 2026, rule 280 (prescribed allowances, including an allowance granted to meet the expenditure incurred on conveyance in the performance of duties).
8. Income-tax Act, 1961, Section 10(14)(i) read with Rules 2BB(1)(c) and 2BB(3) of the Income-tax Rules, 1962, as substituted by Central Board of Direct Taxes Notification No. 43/2023 dated 21 June 2023, G.S.R. 452(E), which had earlier been inserted by Notification No. 38/2020 dated 26 June 2020, G.S.R. 415(E) (governing the return for the financial year 2025-26).