How to Calculate Transport Allowance?

If you want to know how to calculate TA in salary, I’d like to say that you refer to your pay slip or contact HR for assistance in calculating your Transport Allowance. Your employer sets the fixed amount. Unless your organisation decides to change it, it remains the same each month.

An employee receives a transportation allowance to help with the cost of their daily commute from home to work and back home.

How to Calculate Transport Allowance from Basic Salary?

This formula can be used for the TA allowance calculation. 

Transport Allowance is equal to A + [(A x D)/100].

Here;

• A = Transport allowance rate

• D = Current dearness percentage

Up to Rs. 1600 per month in transportation allowance, there is no tax. More than Rs. 1600 is regarded as taxable income.

I hope this information helps you!

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Transport allowance or conveyance allowance is the extra allowance given by the companies to its employees to cover their travel expenses between their office location and home. An employee's allowances are made on top of his or her basic wage and are either taxed as well as or not as a result of the Income Tax Act. The company or organization pays for the transport allowance if the transportation is not provided by them. And if the company provides a transportation facility from office location to home, the individual will not receive any transport allowance from the company. Take a look below to understand the transport allowance calculation.

How to calculate transport allowance in salary?

There is no need for complex computations when calculating the transport allowance limit. The calculation of the allowance is done by considering your work category and the restrictions are set at Rs.1,600 per month or Rs.19,200 per year. You must know that the transport allowance exemption can be combined with other allowances, such as Special Allowance.

For example:

If your company pays you a Special Allowance of Rs.6,000 per month, which is eligible for tax, you can replace it with Rs.1,600 as a transport allowance and obtain tax exemptions. But you should consult your tax advisor before making any decisions or claiming any tax exemptions, to avoid any problems in your work life. 

Transport allowance exemption:

The company can offer transport allowance as much as they want to their employees, there is no restriction on it. Under the Income Tax Act, the taxable income exemption is limited. The transport allowance exemption limit is Rs. 1,600 per month under Section 10(14) of the Income Tax Act and Rule 2BB of the Income Tax Rules (or Rs. 19,200 a year). Individuals with orthopaedic disabilities or who are blind are eligible for a monthly exemption of Rs. 3,200.

This is the perfect guide on transport allowance calculation.