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Seeking Clarity: New Transport Allowance Limits (Draft IT Rules 2026)

ITR 921 views 2 replies

Shyam Swaran

Developer

9 Points Posted on 02 March 2026

I’m looking for some clarity on the proposed changes in the Draft Income Tax Rules, 2026 regarding the transport allowance exemption for physically disabled employees

Metro: ₹15,000 + DA thereon
Non-Metro: ₹8,000 + DA thereon

My Doubts:

Periodicity: Are these monthly or yearly? (Previous limit was ₹3,200/month).
DA Component: How is "+ DA thereon" calculated for private-sector employees?
Metro List: Does this apply to the expanded list of 8 cities (including Bengaluru, Pune, Hyderabad, and Ahmedabad)?

Replies (2)

Quick Summary

Query on Draft IT Rules 2026 transport allowance for disabled employees-whether limits (15,000 metro, 8,000 non-metro + DA) are monthly, DA calculation method, and metro city scope. Response clarifies these are monthly limits and apply to expanded metro list.

Aashok F C Advisory

Finance & Compliance Consultant | FP

362 Points Posted on 02 March 2026

The Draft IT Rules 2026 propose increasing the monthly transport allowance for disabled employees to ₹15,000 in 8 metro cities (now including Bengaluru, Pune, Hyderabad, and Ahmedabad) and ₹8,000 elsewhere, plus a DA component. These are monthly limits and remain one of the few exemptions available under both tax regimes.

Shyam Swaran

Developer

9 Points Posted on 04 March 2026

Thanks for the reply, Aashok. In those rules, only the transport allowance doesn’t have ‘per month’ mentioned next to it. How are we sure that it is monthly?