The government is considering a proposal to raise the tax exemption limit on monthly transport allowance, a move that could enrich taxpayers by as much as Rs 9,000 a year, but at the same time put further pressure on its already-strained finance.
The proposal to increase the tax exemption limit for transport allowance to Rs 3,200 a month from Rs 800 follows a similar hike for government servants under the Sixth Pay Commission award. It is likely to find adoption in the private sector too, triggering greater spending across the economy and boosting the bottomlines of companies in a wide swath of sectors.
A decision on the proposal, following representations from some quarters in the government, is expected soon, a finance ministry official told ET, on condition of anonymity.
Allowances such as transport are governed by the rule 2BB of the Section 10(14) of the Income Tax Act. The board is only required to place the new rule before Parliament whenever it has its next session.
Source : Economic Tmes.
It would be some relief for the Govt.employees looking in to the raising prices of petrol.
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