₹ TaxSetu 2025
Salary — Allowances & Perquisites

Allowances Old vs New Regime: LTA, Food Coupons, Kids, Transport, Car

Almost every allowance dies in the new regime — except divyang transport ₹3,200/mo and official-duty allowances. LTA (block 2026–29), Sodexo ₹50/meal, kids ₹100/₹300: old-only. Full table + car rules.

Allowance survival table

AllowanceOldNew
LTA — domestic fares, 2 journeys/block (2026–29), economy/shortest routeYesNo
Food coupons / Sodexo (Pluxee) — ₹50/meal capYesTaxable
Children education ₹100/mo + hostel ₹300/mo (2 kids)YesNo
Transport for divyang employees — ₹3,200/moYesYes
Conveyance / daily / helper / uniform — wholly for duty, actualsYesYes
Professional tax (16(iii)); entertainment (govt, 16(ii), ₹5k)YesNo
Employer gifts above ₹5,000/yr; club/membership for personal useTaxable perquisite in both

Company car + LTA fine print

  • Company car (personal use): taxable perquisite — ₹1,800/mo (engine ≤1.6L) or ₹2,400/mo (>1.6L), + ₹900 if chauffeur provided. Pure office-use car with logs = exempt.
  • LTA: fares only (no hotel/food), domestic, on leave, with family. Unused 2022–25 claim? Carry one journey into 2026.
  • Phone/laptop for work: exempt if predominantly official — keep the asset register tidy.
Full deduction survival list: what lives in new regime → · Salary structure basics: salary guide →
💡 Pro tip: two allowances people forget
(1) LTA: two domestic trips in a 4-year block, travel fare exempt (old regime) — the current block's last year trips get wasted every cycle; plan one trip before it lapses. (2) Transport allowance for disability: ₹3,200/month exempt u/s 10(14) for orthopedically handicapped employees — genuinely claimed by far fewer people than qualify. Allowances die silently in the new regime, so old-regime filers should harvest every eligible one.

Don't forget: allowances claimed in the old regime need 12BB proofs with your employer AND matching ITR entries — mismatched allowance claims are easy scrutiny triggers.

By TaxSetu Editorial Team · Last reviewed: 7 October 2026

Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in

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Frequently Asked Questions

Divyang transport ₹3,200/month and allowances wholly spent on official duty (conveyance, tour, helper, uniform). Everything else — HRA, LTA, food coupons — is old-regime only.

The current block is 2026–2029: two tax-free domestic journeys (fares only, economy, shortest route). One unused 2022–25 claim carries into 2026.

Yes — the ₹50/meal exemption is old-regime only; in the new regime the full coupon value is taxable.

₹1,800/month (≤1.6L engine) or ₹2,400/month (>1.6L), plus ₹900 for a chauffeur — in both regimes. Pure office-use cars with logs are exempt.