New Tax Regime: Can one claim LTA, profession tax, academic and uniform allowances?

Deductions not available under the new regime include those under Chapter VIA, such as Section 80C, 80D, 80TTA and 80TTB.

For salaried individuals, exemptions on several allowances have also been removed. Leave Travel Allowance (LTA), House Rent Allowance (HRA), children’s education allowance, and hostel allowance are now taxable if you opt for the new regime. The basic exemption of Rs 1,500 for clubbing a minor child’s income is also not available.

The deductions still allowed under both regimes are:

Standard deduction from salary: Rs 75,000 under the new regime (compared to Rs 50,000 under the old regime).

Employer’s contribution to NPS: Up to 14% of basic salary under the new regime (vs. 10% under the old regime).

Further, allowances paid to employees to meet expenses incurred for official duties are still allowed under the new regime.

Now, to your specific query. Profession tax is not allowed as a deduction while computing salary income under Section 16(iii) in the new regime. Uniform allowance and academic allowance are not specifically listed under Rule 2BB. However, if these are genuinely incurred in the performance of duties, they can be exempt under the new regime, provided the employee submits proof of expenses to the employer. As per CBDT FAQs, uniform allowance is exempt to the extent of actual expenditure incurred for official purposes.

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