7.1 General travel allowances

7.1     General travel allowances

With effect from 1 April 2019, the concept of a transport allowance was removed from the Act. Before the amendment, employees were given an allowance of INR 1,600 per month for commuting from their residence to place of work. Instead, a flat deduction of INR 50,000 is permitted as per section 16(ia) of the Act.

An employee may be paid an allowance to meet the expenses relating to employment or work. This allowance is not treated as a perquisite and is exempt as per section 10(14)(i) of the Act.

Employees may be