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Travel Allowance: Tax Exemptions Under Different Regimes

What Is Travel Allowance?

What Is the Exemption Limit on Travel Allowance?

As per Section 10(14) and rule 2BB of the Income Tax Act, 1961, individuals can get an exemption on travel allowance. Take a quick glance at the following table to learn about the exemption limit of travel allowance specified under the Income Tax Act.

Allowance Type

Exemption Limit

Transport allowance to commute from one’s residence to place of duty.*

Limited to the actual expenditure made by the employee

Transport allowance to commute from place of residence to place of duty/office for physically challenged employees.**

₹ 3,200 per month

Transport allowance for employees of transport business for covering personal expenditure during the running of such transport

Exemption amount of 70% of such allowance or ₹10,000 per month, whichever is lower.

[Source]

**Physically challenged employees –employees who are deaf or dumb or blind  or orthopedically handicapped with disability of lower extremities

Individuals can get a fair idea about the exemption limit from the table mentioned above. Now, let’s learn about travel allowance under the new tax regime (FY 2020-21 onwards).

What Is Travel Allowance Under the New Tax Regime (FY 2020-21 Onwards)?

How Is Travel Allowance Different from Conveyance Allowance?

Frequently Asked Questions