Most of the salaried individuals are provided transport allowance by their employers for the purpose of commuting between the place of their residence and the place of duty. Such allowances received is exempt from tax upto a certain limit.

As per the Income Tax Act 1961 (the Act), transport allowance provided to an employee shall be exempt upto Rs. 800 per month for the purpose of commuting between the place of his residence and the place of duty. Further a sum upto Rs. 1600 per month shall be exempt if the same is provided to an employee who is blind or orthopaedically handicapped with disability of lower extremities to meet his expenditure for the purpose of commuting between the place of his residence and the place of duty.

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