May 062016
 

Transport Convenience Allowance, Rules, Exemption in Income Tax in 7th Pay Commission

According to the definition, the transport allowance or conveyance allowance stands for special category incentive or allowance hat is given by the government for its employees working in the government sector. The allowance is used by the employees to cover their travelling expenses that they incur when travelling from their home to their work place.

Transport Allowance Rules Tax exemption 1

Transport Allowance Rules

  • Under the latest recommendations made by the government sector it is certain that this allowance will be valid only for employees working in the government sectors.
  • The allowance will be paid to cover the traveling expense for their employees only between their home and work destination.
  • The allowance will be calculated for a period of one year for the employees. It is also certain that employees of the central government sector will be getting TA as per recommendations under 6th

Transport Allowance Limits under FY 2016-17 and FY 2017-18

  • Under the 6th CPC it is certain that the government had set a limit of Rs 19,200 for which the government shall not charge any tax amount.
  • The government had set this as the maximum traveling allowance that will be valid for tax exemption for the employee for the fiscal year 2016-17.
  • Under the recommendations the government had not stated the maximum limitation of TA that will be given to the employee.
  • The set amount is to be paid for the employee for covering one year travelling cost (Rs 1600 monthly).
  • As for central government sector employees it is certain that they will be paid the same TA as no changes has been made by the government in TA.

Transport Allowance Taxable or not?

  • With the limitation of Rs 19,200 per annum it is certain that if the cost of travelling for an employee does not exceed this limitation (Rs 1600 monthly) then the amount is not taxable.
  • In case the TA exceeds this limitation then it is certain that under the recommendations made transport allowance will be taxable under 7th pay commission.

Transport Allowance Calculator

  • When calculating the transport allowance at level 1 and 2 employees will be given Rs 1350 + DA belong to Cities categorized as higher TPTA while for other cities it will be equivalent to Rs 900 + DA every month.
  • For employee belonging to level 3 to 8 for higher TPTA cities it will be Rs 3600 +DA and for other cities it will be Rs 1800 + DA monthly.
  • Employees from level 9 and above will be offered with allowance of Rs 7200 + DA per month while for other cities it will be Rs 3600 +DA monthly.

Transport Allowance for handicap

  • Under the recommendations made by the government in 7th pay commission it is clearly stated that the handicapped person will be given with a minimum allowance of Rs 2250 + DA monthly.

Transport Allowance in 7th Pay for central employees

  • As per the recommendations made it is certain that the central government employees will still be receiving the same transport allowance facilities as they were given under the previous pay commission.
  • Under the 7th pay commission the government has already settled the rate of DA equivalent to 125 percent with no further changes in TA which will be implemented from January 1st
  • The government has also changed the marked A1/A category cities and renamed after alteration such that the employees will still be eligible for receiving Higher TA.
  • This change has been made as the cost of travelling for employees in these cities is always much higher as compared to other cities in the country.

Transport allowance details 

Sl. No. Attributes Related Data
1 Name of allowance Convenience Allowance / Transport Allowance
2 Total no. of Higher TPTA cities 19 cities
3 Higher TPTA cities names Delhi, Kolkata, Bangalore, Hyderabad, Chennai, Mumbai, Kanpur, Nagpur, Jaipur, Lucknow, Pune, Surat, Ahmedabad, Patna, Indore, Kochi, Kozhikode, Ghaziabad, Coimbatore.
4 TA for 1 – 2 pay level (Higher TPTA cities) Rs. 1,350 + DA
5 TA for 1 – 2 pay level (Other places) Rs. 900 + DA
6 TA for 3 – 8 pay level (Higher TPTA cities) Rs. 3,600 + DA
7 TA for 3 – 8 pay level (Other places) Rs. 1,800 + DA
8 TA for 9 and above pay level (Higher TPTA cities) Rs. 7,200 + DA
9 TA for 9 and above pay level (Other places) Rs. 3,600 + DA
10 TA for officers of pay level 14 and above Rs. 15,750 + DA
11 Minimum TA for disabled employees Rs. 2,250 + DA
12 Sections of Inx=come Tax exemptions on Transport allowance Section 10 (14) ii of the Income Tax Act as well as Rule 2BB of the Income Tax Rules

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