Unless you work from home, you must be incurring expenses on your travels between home and workplace. In this article, we are going to discuss how and to what extent you can claim these as well as other travel expenses in your tax return. 

Expenses for travel between home and workplace 

The expenses that you incur for commuting between your home and workplace are generally considered as personal expenses. However, there are some situations wherein you can claim a deduction for travel expenses for travel between home and workplace and between two workplaces. 

Travel expenses include those incurred on driving your car, ride-sharing, flight tickets, taxis, etc. Further, if the expenses are incurred partly for personal expenses, then you must claim only that portion of expenses that relates to work duties. 

Car expenses 

These expenses can be claimed by you when you are using your own care for performing work-related duties. There are two methods as follows to determine the amount of deduction: 

Cents per kilometer method 

Here is how the method works: 

  • Deduction @ 68 cents per kilometer (*72 cents per kilometer from 1st July 2020) 
  • Maximum 5,000 work-related kilometers to be considered 
  • No expense in excess on the above deduction can be claimed 
  • Records evidencing work-related kilometers is to be maintained 

Logbook method  

The logbook method functions in the below manner: 

  • Work-related percentage of the car expenses is calculated 
  • The percentage is applied to the car expenses to arrive at the deduction 
  • Expenses that can be claimed includes the decline in value and running costs 
  • Records such as logbook and odometer readings shall be maintained 

Other travel expenses 

If you incur any other travel expense in relation to your work then you may claim the same as a deduction. These expenses may include toll charges, car parking, accommodation expenses when staying in another state for work purposes, fuel expenses on a bike, and so on. Make sure while claiming a deduction that you reduce the portion of expenses relating to personal expenses. 

Accommodation expenses 

If you are required by your employer to travel for business reasons to the other states then you might be receiving accommodation allowance. This is an income which you shall disclose in your tax return. Only if you show the allowance as an income, you can claim the accommodation expenses. There are some other conditions as well which are needed to be fulfilled to claim accommodation expenses. 

What expenses you can’t claim? 

Relocation expenses  

You might incur expenses when you take a transfer in your existing job or when you switch to a new job. These expenses relating to your relocation or removal can’t be claimed as a deduction. 

Fines 

Fines such as overspeeding fine can not be claimed as an expense deduction. 

Example- overspeeding 

Normal trip expenses 

The cost that you incur on your travel between your home and workplace is a private expense that can’t be claimed. 

If there is anything for which you need clarity you may reach out to our team at Auditax.