Transport allowance

Yes

Here's an excerpt from Arun Jaitley's Budget speech on personal income tax:

There is a general perception in the society that individual business persons have better income as compared to salaried class. However, income tax data analysis suggests that major portion of personal income-tax collection comes from the salaried class. For assessment year 2016-17, 1.89 crore salaried individuals have filed their returns and have paid total tax of Rs1.44 lakh crores which works out to average tax payment of Rs76,306/- per individual salaried taxpayer. As against this, 1.88 crores individual business taxpayers including professionals, who filed their returns for the same assessment year paid total tax of Rs48,000 crores which works out to an average tax payment of Rs25,753/- per individual business taxpayer. In order to provide relief to salaried taxpayers, I propose to allow a standard deduction of Rs40,000/- in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.

However, the transport allowance at enhanced rate shall continue to be available to differently-abled persons. Also other medical reimbursement benefits in case of hospitalization etc., for all employees shall continue. Apart from reducing paper work and compliance, this will help middle class employees even more in terms of reduction in their tax liability. This decision to allow standard deduction shall significantly benefit the pensioners also, who normally do not enjoy any allowance on account of transport and medical expenses. The revenue cost of this decision is approximately Rs8,000 crores. The total number of salaried employees and pensioners who will benefit from this decision is around 2.5 crores.