Travel Allowance (TA) is also referred to as the conveyance or transport allowance. This is the allowance provided by your employer for your day to day travel needs. Since, you would incur expenses while coming to your company from your residence, this is taken care by your employer.
Almost all the employers provide the travel allowance to the employee. As per Section 10(14)(ii) of Income Tax Act and Rule 2BB of Income Tax Rules, travel allowance are exempted from taxation upto the amount of 19,200 INR per annum. This makes it 1600 INR per annum. This is a reasonable amount considering the hike in prices in all kind of transport. Before April 2015, the travel allowance was 800 INR. Since then it has been increased to 1600 INR for everyone.
How can you be exempted from paying taxes on Travel Allowance (TA)?
If your employer specifically pays you 1600 as travel expenses, then you can show this amount for tax exemption. However, if your employer does not specifically mention about the travel allowance, but gives you something like special allowance, etc., then you can deduct 1600 INR from that amount and show as travel expenses.
For example, if you are getting an amount of 6000 INR as allowance of some other kind and there is no mention of travel allowance in your salary, then you can deduce 1600 INR as your travel expenses and get tax exemption on it.
The good thing about travelling allowance is that you need not submit any proof for reimbursing this amount. You are by default given this amount as TA even if your expenses are less than 1600 INR. Hence, you can claim this amount in full for tax exemption.
However, if your company is providing you with the transport facility, you cannot apply for any tax exemption on that. If your travel expenses are more than 1600 INR, you will have to bear the extra expenses. If your employer is providing TA of more than 1600 INR, then the rest amount will be taxable.
Are Leave Travel Allowance (LTA) and Travel Allowance (TA) the same?
Do not confuse and mix both. LTA is for the purpose of travelling for a longer distance mainly by air, rail or bus/car. This may or may not be on the discretion of your employer. We will talk more about LTA in a separate article. So, if you are travelling for longer distance do not show it in travelling allowance.
Travelling allowance will cover the day to day expense of travelling from your home to office. That’s it. Any other expenses that involves travelling should not be included in this. It should be considered as a separate expense.
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