Another big gift from Income Tax. Another daily expenses were tax free. Those above 12 lakhs also got relief.

The central government has made a major change in the proposed Income Tax Bill 2025, which is directly related to the benefit of salary employees. Till now, there was a tax exemption on the expense of the train given by the company for going to office. But the new bill has made it clear that if the employer affects your office, cab, taxi or any means, then it will remain tax-free.

What was the rule earlier?

In the Income Tax Act, 1961 section 17 (2) (iii) was stated:

“The use of a vehicle given by the company or employer will not be considered a perquisite if it is for traveling from home to office and office to home.”

But in the language of this rule, the words 'train given by the company' led to many disputes in the court.

What has been changed now?

The proposed income tax bill, section 17 (2) (e) of 2025 stated:

“Any expenditure incurred by the employer on the use of any vehicle for traveling from the employee's residence to the office and office to the residence will be tax -free revision.”

This means that whether the vehicle is the employer, your or you have booked a cab – if the company pays it or spends it, it will be considered tax free.

What is the opinion of experts?

✅ 1. Clarity has come:

Shalini Jain, Tax Partner, Ey India Says:

“Earlier, the decisions of the court had to be dependent on the laws that the cost of any vehicle by the employer will be tax free, whether it is directly payment or references.”

✅ 2. 2. You will get benefit in large range:

Ca Suresh Surana Is said:

“Now not just the company's car, but any vehicle expenses pay for the employer, it means that if you come by Ola-Uber or Metro, you will not have to pay tax.”

✅ 3. 3. The purpose of the rule is the same, the language has changed:

Ca Ashish Karundia Is said:

“The core is the same, the language has been made easy and controversial.

What will be affected on salary people?

👉 1. Travel expenses from the company will be tax free

Now whether it is the company of the company, the company has paid the cab, or your own expenses have been paid – all will remain tax free.

👉 2. No change in travel allowance or travel allowance

If the company only gives travel allowance, then it will not be tax free. But if the expenses have been paid, then there will be tax exemption.

👉 3. Profession for employees

Now you will not have to pay tax even for remuneration. Earlier there was only benefit on the vehicle given by the company.

Will companies be affected?

✅ Documentary burden will increase on companies

Yogesh Kale, Executive Director, Nangia Andersen llp They say:

“Companies have to keep the record, bill, travel details of reections so that tax authorities can be proved that the expenses were of office travel.”

✅ The risk of fraud will also increase

Dinkar Sharma, Company Secretary They say:

“The definition of the employer's expenses has become widespread. It is a good thing, but companies have to keep in mind that this provision should not be misused.”

See the new and old difference in the table:

In simple language, if your company bears any expenses for going to your office (by paying directly or through references), then that expenditure will now be considered completely tax free. But companies have to keep documents to prove that this expenditure is only of office travel.