Exempt Transport / Running Allowance from Income-Tax: 48th NC JCM Meeting
Minutes of the 48th Meeting of the National Council (JCM) held on 26.06.2021 vide DoP&T OM No.3/4/2021-JCA dated 14th July, 2021
5.17 Item No. NC-47/7/19: Exempt Transport / Running Allowance from Income-Tax.
The issue raised is that the present Income Tax exemption limit of the TA is Rs.800 pm but in view of rate increase, TA of Rs.3200 plus DA be exempted from Income Tax.
Joint Secretary, D/ o Revenue stated that the current policy of the Government is to withdraw the individual allowance and allow a general deduction which would be available to all taxpayers.
Secretary, Staff Side apprised that Loco Pilot, Guard etc. work day and night and get running allowances. He further stated that this item was discussed in the 47r.h meeting of NC, JCM also but no solution has been found so far. He stated that the Running Allowance can be bifurcated into two parts viz . 70% as TA component and 30% as miscellaneous component (charges for food etc.) . The 70% should be exempted from the Income Tax on the analogy that there is no Income Tax on Travelling Allowance. He suggested that there should be a meeting on this issue.
Leader, Staff Side stated that this issue has been pending with CBDT for more than 5 years and requested for expeditious clearance to Railway Ministry.
Decision: Cabinet Secretary directed the representative of D/ o Revenue to apprise Revenue Secretary of the matter, and to have this resolved early in consultation with Chairman, CBDT and Chairman, Railway Board.