Tag: Salaried Persons

Leave Travel Allowance (LTA): Exemption Limit, Rules, How to Claim and Eligibility

Posted on by CA Meet Dhrangadhariya

Last updated: 06 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • LTA is a tax-free reimbursement of the actual fare for travel within India, given by your employer for you and your family, in the old tax regime only.
  • The exemption is for two journeys in a block of four calendar years. The block 2022 to 2025 has ended and the new block is 2026 to 2029.
  • Only the fare is exempt: hotel, food, local travel and sightseeing are not. Travel abroad does not qualify.
  • Rail is limited to AC first class; where there is no rail or public transport, the rules set other limits, including ₹30 a km where no public transport exists.

Leave Travel Allowance (LTA), also called Leave Travel Concession (LTC), is an amount your employer gives you to travel with your family within India. The travel fare is exempt from tax, up to the limits in the rules, if you are in the old tax regime.

Where is it in the law?

For FY 2025-26 (assessment year 2026-27) LTA is exempt under section 10(5) of the Income-tax Act, 1961 and Rule 2B. From Tax Year 2026-27 it is in the Schedule III of the Income-tax Act, 2025 (Table Sl. No. 8), with the conditions in Rule 278 of the Income-tax Rules, 2026.

Who can claim?

An individual who gets travel concession or assistance from an employer (or a former employer, for travel after retirement or termination of service) for self and family, for travel to any place in India. Family includes the spouse, children, and dependent parents, brothers and sisters.

What is exempt?

Only the amount actually spent on the fare, subject to these limits:

  • By air: the fare for the class to which the employee is entitled (under the 1961 Act rule, the economy fare of the national carrier), by the shortest route.
  • By rail, or any other mode where the places are connected by rail: the AC first class rail fare by the shortest route.
  • Where the places are not connected by rail and a recognised public transport system exists: the first class or deluxe class fare by the shortest route.
  • Where no recognised public transport exists and no rates are prescribed: ₹30 per km for the shortest route.

Hotel, food, local conveyance, sightseeing and shopping are not exempt. The exemption cannot be more than what your employer gives you.

Two journeys in a block of four years

The exemption is for two journeys in a block of four calendar years. The blocks so far: 2018 to 2021, 2022 to 2025. The new block is 2026 to 2029, and the next is 2030 to 2033.

Carry-over of an unused journey

If you did not use the exemption in a block, the journey you first avail in the first calendar year of the next block is also exempt. It does not count against the two journeys of that new block. So for the block that ended in 2025, an unused journey can be claimed for a journey you make in 2026.

Children

The exemption is for not more than two surviving children. The limit does not apply to children born before 01/10/1998, or to additional children from multiple births after the first child.

Example

Ms Ankita travelled to Shimla in December 2025 with her husband and two children (four persons). The air fare was ₹10,000 each way per person, which equals the admissible fare. Her employer paid ₹50,000 as LTA.

  • Fare actually spent: ₹10,000 x 4 x 2 = ₹80,000.
  • LTA received: ₹50,000.
  • The exemption is the lower figure, ₹50,000, if she is in the old regime. Under the new regime nothing is exempt.

A trip to Dubai is not eligible, because the travel must be within India.

How to claim

  • Your employer sets a date for you to submit tickets, boarding passes or invoices and a declaration. The exempt amount then shows in Form 16.
  • If you did not claim it with your employer, you can still claim it when you file your return, in the exempt allowances part of the salary schedule. Keep your tickets and proofs.

LTA in the new tax regime

LTA is not available in the new regime. File your return on time under the old regime if you want it, because a person without business income chooses the old regime along with the return furnished by the due date.

Common mistakes

  • Claiming hotel, food or sightseeing costs.
  • Claiming travel outside India.
  • Claiming more than two journeys in a block, or for more than two children born after 01/10/1998.
  • Not keeping tickets and invoices.
  • Claiming the whole route when you visited several places: only the shortest route from the starting point to the destination counts.
  • Assuming that any holiday travel is covered. Some employers allow LTA only if you take leave and travel in that period, so follow your employer’s policy.

Frequently asked questions

How many LTA journeys are exempt?

Two journeys in a block of four calendar years. The current block runs from 2026 to 2029.

Can I claim LTA for foreign travel?

No. The exemption is only for travel to places in India.

What expenses are covered?

Only the fare for the travel. Hotel, food, local conveyance and sightseeing are not exempt.

Can I carry over an unused LTA journey?

Yes. If a journey was not availed in a block, one journey can be claimed in the first calendar year of the next block, in addition to the two journeys of that block.

Is LTA available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Telephone and Internet Allowance: Is It Taxable?

Posted on by CA Meet Dhrangadhariya

Last updated: 28 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • When the employer reimburses or pays your telephone and mobile phone expenses, the payment is not taxed as a perquisite.
  • A fixed telephone or internet allowance paid in your salary, without bills, is part of salary and is taxable.
  • There is no separate rupee limit for the reimbursement in the rule, but it should be for official use and reasonable for your role.
  • The perquisite rule is the same in the old and new tax regimes.

With work from home and hybrid working, many employers pay for telephone and internet. Whether the payment is taxable depends on how it is paid: as a fixed allowance in your salary, or as a reimbursement of the bills you submit.

Reimbursement of bills

When the employer pays or reimburses the actual cost of your telephone or mobile phone bills, the benefit is not taxed as a perquisite. The perquisite valuation rules (rule 3 of the Income-tax Rules, 1962, and the corresponding rule in the Income-tax Rules, 2026) value “any other benefit or amenity” provided by the employer but exclude expenses on telephones, including a mobile phone.

  • Keep the bills in your own name, or as your employer asks.
  • The use should be for official work.
  • There is no limit in the rule on the reimbursement amount, but your employer will usually fix a reasonable cap by your role.

Fixed allowance

If the employer pays a fixed amount every month, for example ₹1,500 as “telephone and internet allowance”, with no bills, it is part of your salary and is taxed at your slab rate. The exemption for reimbursement is not available.

What about internet and broadband?

The rule is worded around telephones, including mobile phones. Employers commonly extend the same treatment to broadband and mobile data used for work. If you get a reimbursement for broadband, follow your employer’s policy and keep the bills and the employer’s certificate that it was for official use.

Old or new regime?

The same treatment applies in both regimes, because it is a perquisite valuation rule and not an exemption that the new regime withdraws.

Example

Ms K gets ₹1,200 a month fixed as “mobile and internet allowance”. It is taxable salary of ₹14,400 a year. Her colleague submits his actual mobile bills of ₹1,200 a month to the company, which reimburses them. The reimbursement is not taxed.

Tips

  • Prefer a reimbursement structure if your employer offers it, as it is the more tax-efficient route.
  • Do not claim a reimbursement for personal use or for bills you did not pay.
  • Keep copies of bills, as the employer or the department may ask for them.

Frequently asked questions

Is a telephone allowance taxable?

A fixed telephone allowance paid with your salary is taxable. A reimbursement of your actual phone bills by the employer is not taxed as a perquisite.

Is there a limit on tax-free reimbursement?

The rules do not set a rupee limit. It should be for official use and reasonable for your job.

Is internet or broadband covered?

The rules refer to expenses on telephones, including a mobile phone. Many employers treat broadband used for work in the same way, so check how your employer treats it and keep the bills.

Does it depend on the tax regime?

No. Perquisite valuation applies to both the old and the new regime.

Official sources

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Uniform Allowance: Tax Exemption, Limit and Rules

Posted on by CA Meet Dhrangadhariya

Last updated: 15 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Uniform allowance is exempt up to the amount you actually spend on buying or maintaining uniforms for official duties.
  • The unspent part is taxable as salary.
  • It is available only in the old tax regime; the new regime does not exempt it.
  • From Tax Year 2026-27 it is in Schedule III of the Income-tax Act, 2025 and Rule 280(1)(g) of the Income-tax Rules, 2026.

A uniform allowance is paid by an employer to meet the cost of uniforms that employees must wear while working, as in the police, defence, hospitals, airlines and banks. The allowance is part of salary, but the part you spend on the uniform is exempt from tax if you are in the old tax regime.

Where is this in the law?

Up to FY 2025-26 it was section 10(14)(i) of the Income-tax Act, 1961 and Rule 2BB(1)(g). From Tax Year 2026-27 it is in Schedule III (Table Sl. No. 12) of the Income-tax Act, 2025, with Rule 280(1)(g) of the Income-tax Rules, 2026, which covers an allowance granted to meet the expenditure incurred on the purchase or maintenance of uniform worn during the performance of duties of an office or employment of profit.

How much is exempt?

The lower of:

  • the uniform allowance you receive, and
  • the amount you actually spend on the uniform.

Any unspent part is taxable as salary.

What counts as uniform expenditure?

  • Buying uniforms.
  • Tailoring or alteration.
  • Laundry and maintenance.
  • Accessories that are part of the uniform.

Example

Mr P gets a uniform allowance of ₹24,000 a year but spends only ₹18,000 on uniforms and laundry. In the old regime ₹18,000 is exempt and ₹6,000 is taxable. In the new regime the whole ₹24,000 is taxable.

Old regime or new regime?

Under section 202 of the Income-tax Act, 2025 the new regime does not exempt this allowance. Rule 280(3) keeps in the new regime only the allowances for travel on tour or transfer, daily charges, conveyance in duties, and the disabled employee’s transport allowance. Uniform allowance is not on that list, so you need the old regime.

How to claim

Give your employer proof of expense or the declaration the employer asks for, so the exemption is allowed in Form 16. If it was not, you can claim it in the salary schedule when you file your return, but keep the bills in case of a query.

Frequently asked questions

How much of uniform allowance is exempt?

The amount you actually spend on the purchase or maintenance of uniform for official duties, up to the allowance you receive. The balance is taxable.

Is uniform allowance exempt in the new tax regime?

No. It is exempt only in the old regime.

What expenses are covered?

Buying uniforms, tailoring and alteration, laundry and upkeep, and accessories that are part of the uniform.

Do I need bills?

Keep bills or a declaration as your employer asks. The exemption is based on actual expense.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Transport Allowance: Tax Exemption, Limits for Tax Year 2026-27 and Rules

Posted on by CA Meet Dhrangadhariya

Last updated: 29 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • A transport allowance for travel between home and office is fully taxable for most employees. The old ₹1,600 a month exemption ended with the standard deduction in FY 2018-19.
  • Employees who are blind, deaf and dumb, or orthopaedically disabled get an exemption: ₹3,200 a month up to FY 2025-26, and from 01/04/2026 ₹15,000 a month plus dearness allowance in metro cities or ₹8,000 plus dearness allowance elsewhere.
  • Employees of a transport business can exempt 70% of the allowance, up to ₹10,000 a month until FY 2025-26 and ₹25,000 a month from 01/04/2026, in the old regime.
  • The disability transport exemption works in both tax regimes.

A transport allowance is an amount an employer pays so an employee can travel between home and the place of work. For most employees it is fully taxable. A special exemption applies to employees with certain disabilities, and a separate one to employees of a transport business.

Up to FY 2025-26 the exemption was under section 10(14) of the Income-tax Act, 1961 and Rule 2BB. From Tax Year 2026-27 it is in Schedule III of the Income-tax Act, 2025, with the amounts in Rule 280 of the Income-tax Rules, 2026.

Why is it taxable for most employees?

Until FY 2017-18 every employee could exempt ₹1,600 a month of transport allowance. From FY 2018-19 that exemption was withdrawn and replaced by the standard deduction on salary, which now stands at ₹50,000 in the old regime and ₹75,000 in the new regime. So an ordinary employee pays tax on the whole allowance and gets the standard deduction instead.

Exemption for employees with disability

The exemption is for an employee who is blind, or deaf and dumb, or orthopaedically handicapped with disability of the lower extremities (from 01/04/2026, the lower or upper extremities), for travel between home and the place of duty.

Period Exempt amount per month
Up to FY 2025-26 ₹3,200
From 01/04/2026, metro cities ₹15,000 plus dearness allowance on it
From 01/04/2026, other cities ₹8,000 plus dearness allowance on it

This is available in both the old regime and the new regime. The part above the limit is taxable.

Transport business employees

An employee of a transport system who gets an allowance to meet personal expenses while on duty during the journey, and who does not get a daily allowance, can exempt 70% of the allowance, up to ₹10,000 a month until FY 2025-26 and up to ₹25,000 a month from 01/04/2026. This is allowed in the old regime only.

Transport allowance and conveyance allowance

Basis Transport allowance Conveyance allowance
For Travel between home and office Travel in the performance of duties, with no free conveyance from the employer
Exemption Only for disability or transport business, as above Actual expense incurred
Regimes Disability: both. Transport business: old only Both

Example

Mr D is an orthopaedically handicapped employee in Mumbai and gets ₹20,000 a month as transport allowance in FY 2026-27, with no dearness allowance on it. The exemption is the lower of ₹20,000 and ₹15,000 (plus DA on it, nil here), so ₹15,000 a month, ₹1,80,000 a year, is exempt. The balance of ₹5,000 a month is taxable.

Another employee with no disability and the same allowance pays tax on the whole ₹2,40,000 a year.

How to claim

Your employer applies the exemption when calculating TDS and shows it in Form 16. Give the employer a disability certificate. If it was missed, you can still claim the exemption when you file your return, in the exempt allowances part of the salary schedule.

Central Government employees

Transport allowance for Central Government employees under the 7th Pay Commission depends on pay level and city class (for example ₹7,200 plus dearness allowance for pay level 9 and above in the highest cities). It is taxable unless the employee has a disability and qualifies for the exemption above.

Frequently asked questions

Is transport allowance taxable?

Yes, for most employees it is fully taxable. The exemption for commuting allowance was withdrawn from FY 2018-19 when the standard deduction was introduced.

Who gets a transport allowance exemption?

An employee who is blind, deaf and dumb, or orthopaedically handicapped with disability of the lower or upper extremities, for travel between home and work.

How much is exempt for a disabled employee from 01/04/2026?

₹15,000 a month plus dearness allowance in metro cities, and ₹8,000 a month plus dearness allowance in other cities (up to FY 2025-26 the limit was ₹3,200 a month).

Is it available in the new tax regime?

Yes, the transport allowance for disabled employees is allowed in both regimes. The transport business exemption is old regime only.

Is transport allowance the same as conveyance allowance?

No. Transport allowance is for travel from home to office. Conveyance allowance is for travel in the performance of duties and is exempt to the extent of the actual expense.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Standard Deduction for Salaried Individuals in New and Old Tax Regime

Posted on by CA Meet Dhrangadhariya

Last updated: 15 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • The standard deduction is a flat amount subtracted from salary or pension income without any proof of expenses.
  • It is ₹75,000 in the new tax regime and ₹50,000 in the old regime, and cannot exceed your salary or pension income.
  • For family pension the deduction is ₹25,000 in the new regime and ₹15,000 in the old regime.
  • From Tax Year 2026-27 it is allowed under section 19 of the Income-tax Act, 2025.

The standard deduction is a fixed amount that salaried employees and pensioners can subtract from their income without producing any bills or proof. It was removed years ago, brought back in Budget 2018, and has been increased since, most recently in the new regime to ₹75,000.

Amount of standard deduction

Regime Salary or pension Family pension
New tax regime (default) ₹75,000 ₹25,000
Old tax regime ₹50,000 ₹15,000

In each case the deduction cannot exceed the salary or pension you actually received. These amounts apply to FY 2025-26 and to Tax Year 2026-27. The Union Budget 2026 did not change income tax rates or slabs for Tax Year 2026-27, and the standard deduction stayed as it was.

Which section gives it?

For FY 2025-26 (assessment year 2026-27) it is section 16(ia) of the Income-tax Act, 1961, whose proviso substituting ₹75,000 for the new regime applies from 01/04/2025. For Tax Year 2026-27 onwards it is section 19 of the Income-tax Act, 2025, which lists all the deductions from salary in one place.

Who can claim?

  • Employees who earn salary income, in private or government jobs.
  • Pensioners, since pension is taxed as salary.
  • Recipients of family pension, at the lower family pension amount.

It is not available for business or professional income, or to someone with no salary or pension.

Why does it matter?

  • It reduces taxable income automatically, so it lowers the tax of nearly every salaried person.
  • No documents are needed.
  • It is available in both regimes, so it does not change the choice between them, but the new regime’s higher amount is one reason many salaried taxpayers find it cheaper.

Example

Ms C earns a salary of ₹9,00,000 in FY 2025-26 and has no other income. In the new regime her taxable income is ₹9,00,000 less ₹75,000, which is ₹8,25,000. In the old regime it would be ₹8,50,000 before any other deductions.

What about the documents for filing the return?

You need no proof for the standard deduction. For the return as a whole, you should still keep Form 16, Form 26AS, the AIS and any proofs for other deductions you claim.

Frequently asked questions

What is the standard deduction for salaried employees?

₹75,000 in the new tax regime and ₹50,000 in the old tax regime, or the amount of your salary if that is less.

Do I need documents to claim the standard deduction?

No. It is allowed automatically on salary and pension income, without proof of any expense.

Can pensioners claim the standard deduction?

Yes. Pension is taxed as salary, so pensioners can claim it. Family pension has a separate deduction of ₹25,000 in the new regime and ₹15,000 in the old regime.

Can a self-employed person claim the standard deduction?

No. It is only for income taxed as salary or pension.

Which section gives the standard deduction now?

Section 19 of the Income-tax Act, 2025 from Tax Year 2026-27. Earlier it was section 16(ia).

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Form 124 (Earlier Form 12BB): What It Is and How to Fill It

Posted on by CA Meet Dhrangadhariya

Last updated: 05 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Form 124 is the statement an employee gives the employer to claim HRA, LTA, home loan interest and Chapter VIII deductions while TDS is calculated. It replaces Form 12BB from 01/04/2026.
  • It has Part A (your details) and Part B (claims and evidence), and is filed once a year with the employer. It is not uploaded on the income tax portal.
  • For HRA you give the landlord’s name, address, PAN, Aadhaar, relationship, if any, and the rent paid. Landlord PAN is a must if yearly rent exceeds ₹1,00,000.
  • If you do not submit it, the employer deducts TDS without allowing any deduction or exemption.

How to submit Form 124 to your employer

1. Check your salary structure for HRA and LTA
↓
2. Collect rent agreement, travel proofs, loan and investment documents
↓
3. Fill Part A with your name, address, PAN, contact details and tax year
↓
4. Fill Part B with the claims you want considered
↓
5. Sign the declaration and hand it to your employer, online or on paper

Every year your employer deducts tax at source (TDS) from your salary. To deduct the right amount, the employer needs to know about your rent, travel, home loan and investments. You tell the employer through a statement. Until 31/03/2026 this was Form 12BB. From 01/04/2026 under the Income-tax Rules, 2026 it is Form 124.

Form 12BB and Form 124 side by side

Old New
Form Form 12BB Form 124
Rule Rule 26C, Income-tax Rules, 1962 Rule 205, Income-tax Rules, 2026
Section Section 192 of the 1961 Act Section 392(5)(b) of the Income-tax Act, 2025

Who files it, and when?

An employee gives it to the current employer, once every financial year, as early as possible so the TDS is calculated correctly. It is only needed if you want your claims considered. If you do not submit it, the employer deducts TDS without allowing any deduction or exemption, and you can claim them later in your own return.

If you change jobs in the year, give the new employer your details of income and TDS from the old employer (Form 122), along with a fresh Form 124.

What does the form contain?

Part A: employee details. Name, address, PAN, email id, contact number and tax year.

Part B: claims and evidence.

  1. House rent allowance: name and address of the landlord, landlord’s PAN, Aadhaar, relationship with the landlord (if any) and the rent paid. Give a copy of the rent agreement.
  2. Leave travel concession or assistance: the travel details, with documents supporting the claim.
  3. Interest on borrowing: name and address of the lender, lender’s PAN where available and the interest paid or payable. Give a copy of the loan agreement.
  4. Deductions under Chapter VIII (A and B): the sections you claim, for example section 123 (the old section 80C), section 124 (NPS), section 129 (education loan interest), section 130, section 131 and section 153 (interest on deposits), with proofs.
  5. Other details as an annexure.

Then comes your declaration that the information is complete and correct.

Landlord PAN

The PAN of the landlord must be furnished if the rent in the year is more than ₹1,00,000. Aadhaar is not mandatory unless your employer asks for it.

Do I file it on the portal?

No. Form 124 goes to your employer, electronically or on paper. It is not uploaded separately on the income tax portal.

Before you fill it

  • Check that HRA and LTA are part of your salary structure. If they are not, there is nothing to claim.
  • Collect the rent agreement and rent receipts, travel tickets, the home loan interest certificate and the investment proofs.
  • Remember that most of these claims work only in the old tax regime. Tell your employer which regime you choose.

Documents you may need

Claim Supporting document
House rent allowance Rent agreement, rent receipts or bank proof, landlord’s PAN if rent is above ₹1,00,000 a year
Leave travel allowance Tickets, boarding passes or invoices
Home loan interest Loan agreement and the lender’s interest certificate
Section 123 items: PPF, ELSS, life insurance, tax-saver FD, NSC, tuition fees Receipts, certificates, passbook
Health insurance premium (80D) Premium receipts
Education loan interest Lender’s certificate showing interest paid
Disability deductions Medical authority’s certificate
Donations Valid receipts in your name

A few tips

  • If you pay rent to your parents, make the payments by bank transfer and ask them to show it as income in their return.
  • Do not submit false rent receipts. It can lead to action by the tax department.
  • Declare only what you really expect to spend. If you do not invest later, your TDS may be short and you will pay more tax when you file.
  • You can still claim missed deductions in your return, so do not worry if you could not give every proof to your employer.

Frequently asked questions

What is Form 124?

A statement showing particulars of claims by an employee for deduction of tax at source under section 392(5)(b) of the Income-tax Act, 2025, read with Rule 205 of the Income-tax Rules, 2026. It replaces Form 12BB.

Is Form 124 compulsory?

No. You file it only if you want the employer to consider your deductions and exemptions while computing TDS.

Do I upload Form 124 on the income tax portal?

No. You give it to your employer, in electronic or physical form.

Is landlord PAN compulsory?

Yes, if the yearly rent exceeds ₹1,00,000. Aadhaar is not compulsory unless the employer asks for it.

Do I need Form 124 for the standard deduction?

No. The standard deduction is allowed in every case.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.