Disabled employees set to get higher monthly travel tax deductions: Report

India’s draft Income Tax Rules for 2026 propose significantly higher monthly travel tax deductions for disabled employees, offering expanded relief for those who are blind, deaf, dumb, or orthopedically handicapped.

According to a report by ET Wealth Online, the deduction — currently capped at Rs 3,200 per month — is set to rise to Rs 8,000 in non-metro cities and Rs 15,000 across eight metro centres, which now include Pune, Bengaluru, Ahmedabad and Hyderabad.

Aarti Raote, Partner at Deloitte India, told ET Wealth Online that the proposed increase reflects rising commuting costs and the added mobility challenges faced by differently-abled employees. She described the move as a welcome step in strengthening workplace inclusion.

The draft rules also propose enhanced relief for employees in the transport sector. Chartered Accountant Avinash Kumar Rao, Partner at Mohindra & Associates, said the allowance — applicable to workers in railways, airlines, shipping and road transport — would see its exemption cap rise from Rs 10,000 to Rs 25,000 per month, while remaining linked to 70% of the allowance received.

Rao noted that the revision restores the practical relevance of the exemption, as transport workers often incur unavoidable personal expenses while on duty away from base locations.

The proposed changes form part of a broader attempt to modernise tax provisions and extend targeted support to employees with higher mobility-related costs. Final implementation will depend on the notification of the rules after consultations.