Big Tax Savings for Disabled Staff: Travel Deduction to Hit ₹15,000 in Metros

In a significant move toward financial inclusivity, the Central Board of Direct Taxes (CBDT) has proposed a substantial hike in travel-related tax deductions for disabled staff.

Part of the Draft Income Tax Rules 2026, the new provisions aim to address rising urban commuting costs and provide targeted relief to individuals with specific physical challenges.

Massive Hike in Transport Allowance for Disabled Staff

Under the current framework, employees who are blind, deaf, dumb, or orthopedically handicapped are entitled to a transport allowance deduction of ₹3,200 per month.

The Draft Rules 2026 propose a sharp increase to ₹15,000 per month for disabled employees.

This applies to those residing in eight major metro cities, including newly added hubs like Bengaluru, Pune, Hyderabad, and Ahmedabad.

For those in non-metro regions, the deduction is set to rise to ₹8,000 per month.

Experts note that this adjustment is long overdue.

The previous limit failed to reflect the practical expenses incurred by differently-abled commuters who often require specialized or private transport services.

Expanding the Metro Definition

The draft rules also modernize the geographic scope of these benefits. Historically, high-tier tax benefits were restricted to the four traditional metros (Delhi, Mumbai, Chennai, and Kolkata).

By including four additional high-growth cities in the “metro” category for these deductions, the government recognizes the evolving economic landscape and the high cost of living in India’s emerging tech and industrial capitals.

Broader Impact and Corporate Inclusivity

The proposed changes are expected to benefit thousands of employees across both the public and private sectors.

Importantly, this specific deduction remains available under both the old and new tax regimes, unlike many other exemptions.

Tax consultants highlight that these reforms offer financial support. They also encourage corporations to strengthen their diversity and inclusion (D&I) initiatives.

By reducing the personal financial burden on disabled staff, the government aims to make the workforce more accessible and equitable.

The Draft Income Tax Rules 2026 are currently open for stakeholder consultation.

Once finalized and notified, these changes are expected to take effect from April 1, 2026, for the Assessment Year 2026-27.

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