Rule 278 — Conditions for purposes of Schedule III [Table: Sl. No. 8] to the Act.
Sub-rule (1) fixes the amount exempted under Schedule III [Table: Sl. No. 8] in respect of the value of travel concession or assistance received by or due to an individual from his employer or former employer, for himself and his family, in connection with his proceeding on leave to any place in India, or to any place in India after retirement from service or after the termination of his service. The exempt amount is the amount actually incurred on the performance of such travel, subject to three limits. Where the journey is performed by air, it shall not exceed the fare admissible for the class of travel to which the employee is entitled, by the shortest route to the destination. Where the places of origin and destination are connected by rail and the journey is performed by any mode other than air, the limit is an amount not exceeding the air-conditioned first-class rail fare by the shortest route. Where the places, or part of the route, are not connected by rail, the limit is the 1st class or deluxe class fare on a recognised public transport system by the shortest route where such a system exists, and where no recognised public transport system exists and no specific rates have been prescribed by the Directorate of Transport of the concerned State or of any neighbouring State, an amount calculated at the rate of Rs. 30 per kilometre for the distance of the journey by the shortest route.
Sub-rule (2) limits the exemption to two journeys performed in a block of four calendar years commencing from the calendar year 2022. Sub-rule (3) provides for a carry-over: where the concession or assistance is not availed of during a block, the value of the concession or assistance first availed of during the first calendar year of the immediately succeeding block is eligible for exemption. Sub-rule (4) provides that the carried-over amount is not to be taken into account in determining eligibility in relation to the number of journeys under sub-rule (2).
Sub-rule (5) provides that the exemption is not available to more than two surviving children of an individual, and sub-rule (6) disapplies that limit for children born before 1st October, 1998 and in the case of multiple births after one child.
Schedule III [Table: Sl. No. 8] exempts the value of travel concession or assistance but does not measure it, and travel is the kind of benefit where the amount spent and the amount properly exempt can diverge widely — by class, by route, by mode. The rule ties the exemption to what was actually incurred and then caps it by the cheapest reasonable equivalent for each situation, so the exemption follows real travel rather than reimbursement policy. Sub-rules (2) to (6) then ration it: two journeys in a four-year block, with a defined carry-over, and a limit on the number of children covered.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Exempt amount, subject to the caps | The amount actually incurred on the performance of such travel | Travel to any place in India on leave, or after retirement or termination of service | Sub-rule (1) |
| Cap where the journey is by air | Not exceeding the fare admissible for the class of travel to which the employee is entitled, by the shortest route | Journey performed by air | Sub-rule (1)(i) |
| Cap where origin and destination are connected by rail and travel is not by air | Not exceeding the air-conditioned first-class rail fare by the shortest route | Any mode of transport other than air | Sub-rule (1)(ii) |
| Cap where the places are not connected by rail and a recognised public transport system exists | Not exceeding the 1st class or deluxe class fare on such transport by the shortest route | As the case may be | Sub-rule (1)(iii)(A) |
| Cap where no recognised public transport system exists | Rs. 30 per kilometre for the distance by the shortest route | Only where no recognised public transport system exists and no specific rates have been prescribed by the Directorate of Transport of the concerned State or of any neighbouring State | Sub-rule (1)(iii)(B) |
| Number of journeys eligible | Two journeys in a block of four calendar years | Blocks commencing from the calendar year 2022 | Sub-rule (2) |
| Carry-over from an unused block | The concession or assistance first availed of during the first calendar year of the immediately succeeding block | Where the concession was not availed of during the block; not counted against the two journeys | Sub-rules (3) and (4) |
| Limit on children covered | Not more than two surviving children of an individual | Does not apply to children born before 1st October, 1998, or to multiple births after one child | Sub-rules (5) and (6) |
Every figure in sub-rule (1) is a ceiling on the amount actually incurred, not an entitlement — the exemption is the lower of what was spent and the applicable cap, so a claim cannot exceed actual expenditure and cannot be built on a notional fare. The Rs. 30 per kilometre rate is the narrowest of the caps and applies only where both conditions in clause (iii)(B) hold: no recognised public transport system, and no specific rates prescribed by the Directorate of Transport of the State concerned or a neighbouring State. Every cap is measured by the shortest route to the destination, so a circuitous itinerary is capped at the direct fare. The carry-over in sub-rule (3) is worth reading with sub-rule (4): the journey carried into the first calendar year of the next block is exempt and is not counted against that block's two journeys, so the following block still has its full quota. The two-children limit in sub-rule (5) is a limit on surviving children and does not reach children born before 1st October, 1998 or multiple births after one child.
An employee travels with his family from one city to another on leave, the two being connected by rail, and drives instead of taking the train, spending Rs. 18,000. The exemption is the amount actually incurred, capped by sub-rule (1)(ii) at the air-conditioned first-class rail fare by the shortest route; if that fare for the family is Rs. 12,000, Rs. 12,000 is exempt and the balance is not. This counts as one of the two journeys available in the four-year block.
An employee meets this rule in the exempt figure his employer computes for travel concession or assistance in the salary computation and Form 16, and in the tickets, fare evidence and declarations the employer asks for before allowing it.
shall be the amount actually incurred on the performance of such travel, subject to the following conditions
The exemption referred to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 2022.
an amount calculated at the rate of Rs. 30 per kilometre, for the distance of the journey by the shortest route shall be admissible