Income Tax exemption limit for Transport Allowance : Enhancement thereof

Enhancement of Income Tax exemption limit for Transport Allowance in the case of Central Government Employees.

National Federation of Indian Railwaymen(NFIR) General Secretary Mr.M.Raghavaiah requested the Finance Minster to enhance the Income Tax limit for Transport allowance in the case of salaried Central Government employees. He said in his letter that the Transport allowance was introduced for the first time in the year 1997 and the maximum rate of the same was kept at Rs.800 per month. The exemption limit from income tax for this allowance in the case of salaried Central Government employees was also fixed at Rs.800 per month in the same year through a notification by CBDT.

He also noted that the exemption limit prescribed in 1997 has been continuing at the same level till date. Over this long period of 14 years, the cost of transport has increased manifold and recognizing this fact the Central Government has itself enhanced the allowance upto Rs.3200 to its employees.

He suggested that the exemption limit may be raised to the level of transport allowance admissible to Central Government employees as was done in the year 1997 as a policy.