Transport Allowance: Save ₹19,200 Tax-Free

Salaried employees can claim a tax-free transport allowance exemption on their salary. Disabled employees get double the benefit. Here is who qualifies, how much you save, and how to claim it correctly.

Here's what happened: Regular salaried employees can claim ₹1,600 per month (₹19,200/year) as tax-exempt transport allowance under the Income Tax Act.. Employees with disabilities — visual, hearing, or locomotor — are eligible for a higher exemption of ₹3,200 per month, totalling ₹38,400 per year.. The exemption applies only to employees NOT receiving a separate reimbursement for daily office commute expenses from their employer..

What you should do: Check your salary slip to confirm if your employer has already structured transport allowance as a separate component — many don't do this automatically.. If you have a disability, inform your HR department and submit proof (disability certificate from a government-recognised medical authority) to claim the higher ₹3,200/month exemption.. If your employer pays a flat CTC without this split, request a salary restructuring at the start of the financial year — it reduces your taxable income legally with zero investment..

This exemption is only available under the OLD tax regime. If you have opted for the new default tax regime for FY 2026-27, you cannot claim transport allowance exemption — factor this into your regime choice.