Applicability of Sec.10(4) to 'Special Travelling Allowance' of pilots of Pawan Hans Ltd. - Income Tax - 1792/CBDT

INSTRUCTION NO. 1792/CBDT Dated: August 9, 1988 Representations were received by the Board from Pawan Hans Ltd. regarding the taxability of the Special Travelling Allowance received by the pilots of Pawan Hans Ltd. It has been clarified by the Pawan Hans Ltd. authorities as well as the Ministry of Civil Aviation that the Special Travelling Allowance paid to the Pilots is nothing but a supplementary lay over allowance and that it is granted to its pilots as reimbursement of additional expenses, incurred by them in their capacity as senior members of the crew towards meals tips, refreshment and other incidentals. 2. The Board have considered the representations and have decided that the "Special Travelling Allowance" paid to the pilots of Pawan Hans Ltd. comes within the scope of Section 10(4) of the Income-tax Act, 1961 and consequently to the extent to which the expenses are actually incurred by the recipients, it would be exempt. 3. While the exemption is confirmed to the expenses actually incurred, the Assessing Officer while making the assessment of any recipient of such an allowance need not be very meticulous to determine whether the allowance has actually been spent. Instead, a certificate may be obtained from each employee in receipt of such allowance to the effect that the allowance in question has actually been incurred by him during the relevant previous year. If such a certificate is furnished, the allowance may be exempted by the assessing officer unless he has reasons to believe that the certificate is not true. 4. These instructions should be applied to all assessments relating to assessment year 1988-89 and earlier assessment years as the provisions of Section 10(4) stand amended with effect from 1.4.1989. However, assessments already completed need not be reopened/rectified for this purpose. 5. These instructions may be brought to the notice of all the officers working in your region.