The Statutory Brief

IT Act 1961 → 2025 / Section 10(14)

Salary

Section 10(14) → Schedule III

Exempt special allowances (travel, uniform, children education, transport, etc.)

Section 10(14) of the old Income-tax Act, 1961 · new Schedule III under the Income-tax Act, 2025

New reference Schedule III, Table Sl. Nos. 12 and 13

Income-tax Act, 1961Section 10(14)

  • 10(14)(i): allowances for official duties to the extent spent
  • 10(14)(ii): personal allowances (children education, hostel, transport) up to prescribed limits
  • Mostly old regime only

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Schedule III, Table Sl. Nos. 12 and 13

  • Duty-related allowances: Schedule III, Table Sl. No. 12; personal allowances: Sl. No. 13
  • Children education allowance: ₹3,000 per month per child (max two) — was ₹100
  • Hostel expenditure allowance: ₹9,000 per month per child (max two) — was ₹300
  • Meal vouchers/food: ₹200 per meal (was ₹50), available under both regimes
  • Transport allowance for disabled employees ₹15,000 a month + DA (metro) / ₹8,000 (others); transport-sector running allowance 70% up to ₹25,000 a month

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Big increases in the Income-tax Rules, 2026 limits from tax year 2026-27 (education, hostel, meal). Section 202(2)(a)(ii) allows only the allowances prescribed for the new regime.

Practice notes

  • Limits are in the Income-tax Rules, 2026 (Rule 280 for education/hostel), as reported on notification; confirm against the official Rules before payroll changes.
  • Meal limit worked out: ₹200 × 2 meals × 22 days × 12 months ≈ ₹1,05,600 a year.
  • Education and hostel allowances are old-regime only.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the children education allowance limit from 2026-27?

₹3,000 per month per child for up to two children, and hostel allowance ₹9,000 per month per child (Income-tax Rules, 2026), under the old regime.

Where are exempt allowances in the new Income Tax Act 2025?

Schedule III, Table Sl. No. 12 (duty-related) and 13 (personal), with limits in the Income-tax Rules, 2026.

What is section 10(14) called in the new Income-tax Act, 2025?

Section 10(14) of the Income-tax Act, 1961 corresponds to Schedule III, Table Sl. Nos. 12 and 13 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 10(14) under the new Income Tax Act?

Big increases in the Income-tax Rules, 2026 limits from tax year 2026-27 (education, hostel, meal). Section 202(2)(a)(ii) allows only the allowances prescribed for the new regime.

Is section 10(14) still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 10(14) of the 1961 Act. Schedule III, Table Sl. Nos. 12 and 13 of the 2025 Act applies from tax year 2026-27.

Related sections

10(13A)→Sch IIIHouse rent allowance (HRA) exemption — 50% now for 8 cities incl. Bengaluru, Hyderabad, Pune, Ahmedabad16→19Deductions from salary: standard deduction, professional tax (and gratuity exemption)17→17Meaning of salary, perquisites and profits in lieu of salary