Holi Offer: 10% OFF on CAclubindia Pro. Subscribe Now! Use Code: HOLIPRO10

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

ITR 211 views 1 replies

Shyam Swaran

Developer

7 Points Joined September 2025

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 (1)

Aashok F C Advisory

Finance & Compliance Consultant | FP

260 Points Joined January 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.