No Income tax on Transport Allowance upto Rs. 1600 – How much you pocket with this.
NEW DELHI: The hike in the tax-free transport allowance limit from Rs 800 to Rs 1,600 a month will cut tax by Rs 2,966 in the highest 30% tax bracket. The tax cut will be lower at Rs 1,978 in the 20% tax bracket. In the lowest 10% bracket (those earning up to Rs 5 lakh), the tax cut will be limited to Rs 989, or just Rs 82 per month.
This hike in the transport allowance limit comes after 18 years. The Rs 800 per month limit was set in August 1997. Many other such limits have been left untouched by the finance minister.
Source: Economics Times
Category: Finance Ministry