In the Union Budget 2015, presented by Finance Minister Arun Jaitley increased the Transport Allowance limit from Rs 800 to Rs 1,600 in a month.

Allowances are fixed periodic amounts, apart from salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee. Such as tiffin allowance, transport allowance, uniform allowance.

There are generally three types of allowances for the purpose of Income-tax Act - taxable allowances, fully exempted allowances and partially exempted allowances.​

Transport allowance is exempt from tax under the Income Tax Law to the tune of Rs 1600. They shall come into force on the 1st day of April, 2015.

For this an individual would get tax relief on Rs 19,200 per year from assessment year 2016-17 as compared to Rs 9,600 in assessment year 2015-16.

The recent notification issued by the Central Board of Direct Tax (CBDT) said that the exemption limit for blind and orthopaedically handicapped to has been doubled to Rs 3,200 a month.

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