Dear Mridula
The Transport allowance or Conveyance allowance is an allowance granted to an employee to meet his/her expenditure for the purpose of commuting between the place of residence & duty. Transport allowance is exempt to the extent to Rs 1,600 per month, i.e. upto Rs 19,200 is exempt for a year. Any amount paid over this limit is taxable. For example if an employee is getting Rs 3,000 as Transport or Conveyance allowance every month, Rs 1,600 is exempt and Rs 1,400 is taxable per month. Thus out of Rs 36,000 transport allowance received for the year, Rs 19,200 would be exempt and Rs 16,800 would be taxable. The exemption limit has already been increased from Rs. 800 to Rs. 1,600 w.e.f. 1 April 2015.