The Central Board of Direct Taxes (CBDT) has notified the Income Tax (Third Amendment) Rules, 2018 wherein the Government has withdrawn the exemption of Transport Allowance of Rs. 1,600 pm to the salaried class.
Earlier, an exemption of Rs. 1600 was given towards transport allowance to an employee to meet his expenditure for the purpose of commuting between the place of residence and duty.
The Budget 2018-19, pronounced on 1st February 2018 has proposed to withdraw the said benefit to the employees. Now, the Finance Act, 2018 has been passed by the Parliament.
The notification shall come into force on the 1st day of April 2019 and shall apply to the assessment year 2019-2020 and subsequent assessment years.
Salaried employees get a fixed quantity of money or other forms of allowances apart from their salary for specific requirements of the employees. Most allowances are a part of the total income unless they come under some specific exemption under the Income Tax Act. Allowances are given to employees for their services or as compensation for working in unusual conditions.
Subscribe Taxscan Premium to view the Judgment
