Da on transport allowance is taxable or not

This query is : Open

MK Karn (Querist)
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07 August 2017 The same query replied on your website by CA Siddhartha Bhardwaj.

The query was Dear Sir, I would like to know whether DA on Transport Allowance is Taxable or exempted. Non Taxable of Transport Allowance at Rs. 800/- Per month increased upto Rs. 1600/- Per month (from FY: 2015-16), a person gets Tr. Allow @ Rs. 800/- and DA on Tr. Allow is Rs. 952/- (Total: Rs. 1752/-). So, in this case, can he avail benefit of Rs. 1600/- per month or Rs. 800/- per month ? Plz suggest asap, as I have not got clear picture of this issue from the Government Notification.

Read more at: https://www.caclubindia.com/experts/da-on-transport-allowance-2265299.asp

Reply was: Only transport allowance is exempt. Other allowances which are calculated as a percentage of transport allowance is NOT exempt. Accordingly DA, which is calculated as a percentage of transport allowance is NOT exempt.

I want to invite your kind attention on Income Tax TDS Circular 01/2017, you are requested to study the last illustration No. 10 annexed with this circular. In which ITD has clearly calculated the DA on Transport allowance under the head "Transport Allowance" and thereafter the deduction of Rs.800/- p.m.(Which was applicable for that period) has been calculated. It is also mentioned that ITD has repeated this example from last 3 years.

From this it is confirm that DA on Transport Allowance is part of Transport Allowance.

Please also calculate the tax deduction of in view of Example 10 of TDS circular in view of the person who was in receipt of Rs.600/-+DA as transport allowance.

Your expert are earnestly requested to give a meaningful article on that.

ALKESH T MEHTA

ALKESH T MEHTA (Expert)
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08 August 2017 Conveyance Allowance to the extent of Rs.1600/-P.M. is allowed,as it is wholly,exclusively & necessarily incurred for the purpose of employment.The question of allowing Rs.152/-(Rs.800/-+Rs.952/--Rs.1600),does not arise.