Transport Allowance Tax Exemption – Complete Guide to Rules

Key Takeaways 

• Transport allowance exemption is allowed only for specially notified categories, such as blind or orthopaedically handicapped employees and specific transport-business employees. See the official Rule 2BB notification for details.
   
• The general ₹1,600 per month conveyance exemption for salaried employees was discontinued for most taxpayers after the introduction of the standard deduction from FY 2018-19, which changed how the income tax exemption transport allowance works for general employees.
   
• Some offices may grant higher transport allowance or special rates for differently abled staff for central government employees. 

If you fall under the group of people who can still claim transport allowance exemption, such as blind employees, orthopaedically disabled employees, or employees working in the transport sector. This blog will help you understand how it works and whether the transport allowance exemption under section 1014 applies to you!

Transport allowance is an employer-paid amount to cover my travel between home and office. It works like a small travel budget that helps me manage daily travel expenses. Under tax rules, the exemption applies only when the law specifically allows it.  The official Rule 2BB PDF clearly defines eligibility, which is why understanding income tax on travelling allowance is important before filing returns. 

If I am a blind employee and receive ₹3,200 per month as transport allowance, then this full amount is exempt because Rule 2BB(2) allows this notified limit. If I am not in that category, then I usually cannot claim this exemption. This is also the basis for the income tax exemption transport allowance, which applies only to notified categories.

Bonus Tip: The Department of Expenditure (DoE) stated that Transport Allowance is not admissible for any period in which an employee is working from home, since no commuting takes place. This rule directly affects how income tax on travelling allowance is calculated in such periods.

Eligibility Criteria for Transport Allowance Tax Exemption 

Here is a table summarising who is eligible under the official rules. Refer to Rule 2BB for the legal text.
 

These eligibility rules come from the Income-tax Rules and official departmental guidance, so always check the cited documents before claiming. Many general employees search for transport allowance exemption under section 1014, but this exemption applies only to notified persons.

Deduction Limits Under Transport Allowance 

This table shows the notified deduction limits under transport allowance and where to find them.
 

Use the official Rule 2BB table and departmental thresholds to compute the exact exempt amount applicable to your case. This is an important part of transport allowance tax exemption india and helps taxpayers calculate correctly.

Required Documents for 80G Tax Exemption

Keep these official documents handy to substantiate any claim under Section 10(14), read with Rule 2BB.
 

These are standard official documents used by taxpayers and employers to substantiate claims under the rules.

How to Claim Transport Allowance Deduction in ITR? 

Follow the official flow and use Form 16 details so your ITR entry matches employer reporting.
 

Enter only the officially allowed exempt amount in the ITR and keep proof ready in case the tax department requests verification. This section helps people searching for a transportation allowance exemption in income tax understand the filing process.

Conclusion

Transport allowance exemptions now apply mainly to specially notified categories under Rule 2BB. Check Form 16 and the Rule 2BB/Income Tax Department resources before claiming. Verify your documents and report the exact exempt amount in ITR. 

FAQs Related to Transport Allowance Tax Exemption

How does transportation allowance work for employees?

Transportation allowance is a fixed amount paid by an employer to help an employee cover daily travel between home and workplace. It may be taxable or exempt depending on the rules under Section 10(14) and Rule 2BB. Only specific categories, such as blind or orthopaedically disabled employees, receive a notified tax exemption. For most employees, the old exemption was discontinued after the standard deduction was introduced.

Can I claim the conveyance allowance exemption in the new tax regime if it is not shown in my Form 16, but I have bills?

No. The new tax regime does not allow conveyance or transport allowance exemptions except for a few notified disability-related cases. If your employer has not reported the allowance as exempt in Form 16, you cannot claim it separately in the new regime, even if you have bills.

Is the travelling allowance and HRA exempt from tax?

If your employer does not show the conveyance allowance as exempt in Form 16, you cannot claim it on your own under the new tax regime. The new regime does not allow this exemption except in specific disability-related cases.

How much of a conveyance travel allowance is exempted from income tax deductions?

Under current rules, conveyance or transport allowance is exempt only for specific notified categories such as blind or orthopaedically disabled employees. They can claim up to ₹3,200 per month. For most other employees, the earlier exemption is no longer available after the introduction of the standard deduction.

Do I need to submit any documents to claim the transport allowance exemption?

Yes. You should keep your salary slip, employer declaration, and, if applicable, a valid disability certificate. These documents support your exemption claim if the tax department requests verification.
 

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