Transport Allowance you are getting from this year won't be exempted in the assessment of IT

The running assessment year, i.e., AY 2018-19 will be the last year when the salaried class can avail the exemption of transport allowance.

The exemption of transport allowance of ₹1600/month, totaling to be ₹19,200/- won't be allowed from the next assessment year as this exemption has been omitted by notification from the list of prescribed exempt allowances [rule 2BB read with section 10(14) of the Income Tax Act, 1961] to the people whose income is taxable under the head 'Income from Salaries'.

However, similar exemption of ₹3,200/month allowed to specially abled people is being continued. This is allowed to people who are blind, deaf, dumb or orthopaedically handicapped with disability of lower extremities (from hips to toe).

Transport Allowance is an allowance given to anindividual to meet the expenditure for the purpose of commuting between the place of residence and the place of his duty.