Transport allowance is paid to an employee for the purpose of commuting between the place of residence and the place of office. In Budget 2015, the finance minister doubled the exemption on transport allowance.
The amount of transport allowance which is exempt from tax has been doubled from Rs 800 per month to Rs 1600 per month.
It has recently been notified via a circular that the limit of exemption for transport allowance granted to an employee, who is blind or orthopedically handicapped with disability of lower extremities shall also be doubled from Rs 1,600 per month to Rs 3,200 per month.
Do take benefit of this exemption if your employer pays you transport allowance. Want to go through other changes announced in this budget – read here.
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