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Leave Travel Allowance (LTA) - Exemption Limit, Rules, How to Claim, Eligibility & Latest Updates

Updated on : Mar 22nd, 2024

The Income-tax Act, 1961 offers salaried individuals several tax exemptions, beyond deductions like LIC premiums and housing loan interest. While deductions reduce your total taxable income, exemptions exclude specific types of income from being taxed altogether. This allows employers to design an employee's Cost to Company (CTC) package in a tax-efficient manner.

One such exemption available to the salaried class under the law and widely used by employers is Leave Travel Allowance (LTA)/Leave Travel Concession (LTC). LTA exemption is also available for LTA received from former employer w.r.t travel after the retirement of service or termination of service. LTA can be claimed for any two years in a block of 4 years . The current block year for claiming LTA is 2022 to 2025.

Note: The tax exemption of leave travel allowance is not available in case you choose the new tax regime .

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance/Leave Travel Concession is a type of allowance given by an employer to their employee for travelling to any place in India: either on leave, after retirement or after the termination of his service. Though it sounds simple, many factors need to be kept in mind before you plan to claim an LTA exemption. Income tax provision has laid down rules for claiming exemption of LTA which are provided below.

Note: The red arrow shows the lower of the two amounts will be exempted. For instance, if you travel by air, the exemption amount will be either your actual travel costs or the cost of an economy class ticket, whichever is lower. The journey should be taken through the shortest route to the destination. 

Who Can Claim LTA?

Only individuals can claim LTA for travel costs incurred for themselves and their family (Spouse, children, wholly or mainly dependent siblings, parents)

Conditions for Claiming LTA

Let us understand the conditions/requirements for claiming the exemption:

• Individual  must be an employee  and should  have an LTA  component in CTC.
• Actual journey is a must to claim the exemption
• Only domestic travel is considered for exemption, i.e., travel within India. No international travel is covered under LTA/LTC
• The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee. 
• Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiple births on a second occasion after having one child is also not affected by this restriction.

Amount of LTA/LTC Exemption

The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation, food, etc., are eligible for this exemption. The exemption is also limited to LTA provided by the employer.

For example, if LTA granted by the employer is Rs 30,000, and the actual travel cost incurred by the employee is Rs 20,000, then only Rs 20,000 will be available as an exemption and the balance of Rs 10,000 would be included in taxable salary income.

Exemption w.r.t Various Modes of Transport

Can lta exemption be claimed on every vacation.

No, an LTA exemption is available for only  two journeys performed in a block of four calendar years .

A block year is different from a financial year and is decided by the Government for LTA exemption purposes. It comprises 4 years each. The very first 4-year block commenced in 1986. The list of block years is 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09, 2010-13 and so on. The block applicable for the current period is  2022-25. The previous block was the calendar year 2018-21.

Carryover of Unclaimed LTA/LTC

In case an employee has not availed exemption with respect to one or two journeys in any of the block of 4 years, he is allowed to carryover such exemption to the next block provided he avails this benefit, in the first calendar year of the immediately succeeding block. 

Consider the below example for a better understanding:

• Where carry over exemption is claimed in the first calendar year of the immediately succeeding block

• Where carry over exemption is not claimed in the first calendar year of the immediately succeeding block

Procedure to Claim LTA

The procedure to claim LTA is generally employer specific. Every employer announces the due date within which LTA can be claimed by the employees and may require employees to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent etc., along with the mandatory declaration. Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit them to the employer based on the LTA policy of the company to tax authorities on demand.

Multi-Destination Journey

Income tax provision provides exemption w.r.t travel cost incurred on leave to any place in India. Conditions pertaining to the mode of transport also refer to the place of ‘origin’ to the place of ‘destination’ and the route which must be the shortest available route.

Hence, if an employee travels to different places in a single vacation, the exemption can only be availed for the travel cost eligible from the place of origin to the farthest place in the vacation by the shortest possible route.

LTA Exemption for Vacation on Holidays

Many organisations that go strictly by the wordings of the income tax provision are allowing employees to claim LTA only if the employee applies for leaves and travel during that time. Such organisations may reject LTA claims for travel on official holidays or weekends.

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Frequently Asked Questions

The amount of LTA/LTC exemption depends on the LTA/LTC component in your compensation package or CTC. You can furnish proof of travel within the block period and claim up to the amount prescribed in your CTC.

The latest block period of four years is from 1 January 2022 until 31 December 2025.

You can claim LTA/LTC exemption only for one trip in one calendar year.

You can claim LTA/LTC benefit for the travel costs of yourself and your family consisting of your spouse, children, dependent parents, brothers, and sisters of the employee.

No, LTC is taxable in case of new tax regime and exempted if chosen to pay tax under old tax regime by fulfilling the required criteria.

Exemption will be available in respect of 2 journeys performed in a block of 4 calendar years.

Yes, you can avail LTC in current block (2022-2025), if you have not availed LTC in previous block. (2018-2021). Where such travel concession or assistance is not availed by the individual during any block of 4 calendar years, one such un-availed LTC will be carried forward to the immediately succeeding block of 4 calendar years and will be eligible for exemption. 

Below example gives you clear understanding :

Example : An employee does not avail any LTC for the block 2018-21. He is allowed to carry forward maximum one un-availed LTC to be used in the succeeding block of 2022-25. Accordingly, if he avails LTC in April, 2023, the same will be treated as having availed in respect of the block 2018-2021. Therefore, he will be eligible for exemption in respect of that journey and two more journeys can be further availed in respect of the block of 2022-25.

Illustration : Mr. D went on a holiday on 25.12.2023 to Delhi with his wife and three children (one son – age 5 years; twin daughters – age 3 years). They went by flight (economy class) and the total cost of tickets reimbursed by his employer was 60,000 (45,000 for adults and 15,000 for the three minor children). Compute the amount of LTC exempt if Mr. D chose to pay taxes under old regime.

Solution :  Since the son’s age is more than the twin daughters, Mr. D can avail exemption for all his three children. The restriction of two children is not applicable to multiple births after one child. The holiday being in India and the journey being performed by air (economy class), the entire reimbursement met by the employer is fully exempt in the hands of Mr. D, since he chose to pay taxes under the old regime.

In the above illustration, will there be any difference if among his three children the twins were 5 years old and the son 3 years old? 

Since the twins’ age is more than the son, Mr. D cannot avail for exemption for all his three children. LTC exemption can be availed in respect of only two children. 

Taxable LTC = 15,000 × 1/3 = 5,000. 

LTC exempt would be only 55,000 (i.e. 60,000 – 5,000).

About the Author

Ektha Surana

Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more

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FREE 9+ Sample Travel Allowance Forms in PDF | MS Word | Excel

10+ Sample Travel Claim Forms

Travel expense form - 8+ free documents in pdf, doc, sample travel expense claim form - 11+ free documents in word ....

Companies have policies on expenses and allowances, which lays down arrangements for employers to cover costs for employees’ travel and other employment-related activities. However, pre-authorization is required and needs approval (typically by the executive director) before the money is spent. Employees assigned to go on business trips need to be prepared at all times. The first thing they need to secure is a travel form.  Travel Forms  are forms which need to be filed prior to the date of travel. Once you’ve filled out the form, you can either send it via e-mail or print it out and submit it.

Travel Allowance Claim Form

Size: 74 KB

Travel Allowance Bill Form

Size: 14 KB

• Travel Allowance Request Form

Size: 133 KB

Travel Allowance Claim Form Sample

Size: 554 KB

Travel Allowance Form in PDF

Size: 142 KB

Travel Forms are categorized into two:

Allowance Forms

These type of forms are provided by the company for its employees to make use of. The company has allotted a certain percentage of its funds for necessary expenses for business trips.

Below are the different types of Allowance Forms:

• Travel Allowance Claim Forms

– are filed after the trip has taken place

– original receipts need to be attached

• Travel Allowance Bill Form to Tour

– are filed prior to the trip

– requires precise details

– filed before travel arrangements – needs approval (by the executive director)

Free Travel Allowance Form

– filed before travel arrangements by possible candidates who can avail of this

Leave Travel Allowance Form

– filed prior to the leave – provides an outline of the details of the trip

Transfer Travel Allowance Form

– is filed prior to the transfer

– family members are included in the transfer

Companies also have some policies which provide employees with travel allowances and reimbursements of accommodation, transportation, and other expenses. In some situations, companies provide a monetary budget for assigned business trips, and it’s the employees prerogative on how to make use of it as long as the work gets done. Another type of form needed are the  Travel Claim Forms . Some forms need to be filled out prior to travel and require approval depending on the urgency.

Travel Allowance Form in Word Format

Size: 106 KB

Size: 13 KB

General Travel Allowance Form

Size: 29 KB

Expense Forms

Trips, whether to domestic or international destinations, incur expenses. However, companies have the prerogative to accept or decline such requests.  Travel Expense Forms  are readily available to all employees provided that the task on hand requires him or her to travel. How frequent do companies grant a reimbursement of travel expenses? This concern undergoes a long process, especially since the Executive Director together with the majority of stockholders have to agree to it. For as long as employees can provide legitimate receipts, then companies would increase their budget for travel and many workers would become more motivated to travel more.

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Leave Travel Allowance Exemption: A Comprehensive Guide

What is leave travel allowance, conditions to claim lta exemption, eligibility for lta exemption, quantum of lta exemption, lta exemption rules for various modes of transport, unclaimed lta, lta exemption in case of job change, lta for multi-destination travel, lta for vacations on holidays, expenses included under lta, procedure to claim lta, frequently asked questions.

Leave Travel Allowance (LTA) is a popular tax benefit provided by employers to their employees in India. It allows employees to save taxes on travel expenses incurred during their vacations within the country. In this comprehensive guide, we will delve deeper into the concept of LTA, how it works, and the rules and regulations surrounding it. Whether you're an employee looking to understand the benefits of LTA or an employer seeking to implement it, this guide will provide you with all the information you need. So, let's begin!

Leave Travel Allowance (LTA) is a tax-free allowance provided by employers as part of their employees' salary component. It allows employees to claim tax exemption on the costs incurred for leisure travel within India. Under LTA, employees are permitted to take a leave from work and travel on vacation, with the costs incurred considered as a tax-free expense. The exemption is allowed twice in a block of four years, subject to certain conditions.

To avail of the LTA tax benefit, employees must submit the bills and travel documents to their employer as proof of travel expenses. The exemption is allowed only for the expenses incurred during the travel period and is subject to specific conditions.

To claim an exemption for LTA, employees must fulfill the following conditions:

• The employee must actually travel to be eligible for LTA. Claiming LTA without actually traveling is not permitted.
• The vacation should be taken only within India.
• Costs incurred for family members who travel with the employee would also be allowed as an exemption. The family members include spouses, children, dependent parents, and dependent siblings.
• LTA components must be included in the salary structure of the employee.
• The exemption can be claimed for up to two children born on or after 1st October 1998. There is no restriction for children born before this date or in cases of multiple births on a second occasion after having one child.
• LTA exemption is allowed for up to two journeys taken within a block of four calendar years. The current block year for claiming LTA started in 2022 and will end in 2025. Unused LTA entitlement for the current block year is forfeited if not claimed, and the employee will need to wait for the next block year to claim LTA again.
• LTA can be claimed for travel by any mode of transport, including air, train, or road.
• No LTA is allowed for hotel accommodation and food.

The eligibility for LTA exemption depends on the actual cost incurred on travel. Employees can claim LTA exemption for the expense incurred on booking a journey from their place of origin to the place of travel and back. The journey should be undertaken through the shortest possible route by air, rail, or bus. Only the cost of tickets booked for travel is allowed as an exemption. Costs incurred on conveyance, sightseeing, accommodation, shopping, and food are not allowed. If the employer offers a lower LTA allowance than the actual travel cost, the exemption is limited to the LTA allowed by the employer.

For example, if the employer allows an LTA of INR 25,000 and the employee incurs travel costs of INR 35,000, the LTA exemption can be claimed only for INR 25,000. Conversely, if the employee incurs a cost of INR 20,000, the exemption allowed would be INR 20,000.

The quantum of LTA exemption depends on the actual cost incurred on travel. The LTA exemption is allowed for the expense incurred on booking a journey from the employee's place of origin to the place of travel and back, through the shortest possible route via air, rail, or bus. Only the cost of tickets booked for travel is allowed as an exemption. Costs incurred on conveyance, sightseeing, accommodation, shopping, and food are not allowed.

The actual travel costs incurred for LTA exemption depend on the mode of transport. The rules for determining the exempted travel costs for various modes of transport are as follows:

• When the destination is not connected directly by a recognized public transport, the exempted travel costs are considered to be the fare of AC first-class rail tickets from the origin city to the destination city, assuming the journey is made by rail and the shortest route is taken.
• If the destination is connected by all recognized public transport other than trains, the exempted cost would be the fare of first class or deluxe class on such transport for the journey taken using the shortest route.
• If the destination is connected by trains, the exempted cost would be the fare of an AC first-class train ticket for the shortest route, whether the journey has been taken by train or not.
• If the employee travels by air, the exempted cost would be the fare for economy class of a national carrier using the shortest route.

LTA exemption is available for two journeys undertaken in a block of four years. However, if an employee does not take two journeys within the four-year block, only one unutilized LTA can be carried forward to the next block of years and claimed therein. To claim the unutilized LTA, the employee must take a trip in the first calendar year of the next block. If the unutilized LTA is not claimed within the first year of the next block, it will expire and cannot be claimed later on.

Even if an employee changes their job within a block of four years, LTA exemption is still available. If the change happens within the block and there is any unutilized LTA, it can be claimed with the new employer. However, if the LTA has been availed from the old employer, the new employer will not allow any new LTC.

If an employee goes on vacation and visits multiple cities, the exempted LTA amount will cover the cost of round-trip travel from their home city to the farthest city they visit and back. In other words, the LTA will reimburse the employee for the most expensive leg of their travel.

For example, if an employee resides in Delhi and decides to go on vacation to Mumbai, Kolkata, and Chennai, the cost of round-trip travel from Delhi to Mumbai is ₹5000, from Delhi to Kolkata is ₹4000, and from Delhi to Chennai is ₹6000. In this scenario, the exempted LTA amount would be ₹6000, which is the cost of the round-trip travel from Delhi to Chennai and back. Even though the employee visited multiple cities, the LTA will cover the expense of the farthest city visited and the return journey.

Under the Income Tax Act, LTA is allowed only when the employee takes a leave from work and then travels on vacation. If the traveling is done on holidays, the same is not allowed for LTA exemption. However, organizational practices might differ, and some companies may allow LTA exemption even if the trip is taken on a holiday, while others may not.

Under the Indian Income Tax Act, the following expenses can be included under LTA:

• Travel expenses: LTA covers the cost of travel for the employee and their immediate family members, including spouse, children, and dependent parents or siblings. The travel can be undertaken by air, rail, or public transportation as per the specific rules defined by the employer or the Income Tax Department.
• Destination: LTA is meant for travel within India. Employees can claim expenses incurred on traveling to any place in India for their leave period.
• Mode of travel: LTA covers expenses incurred on travel by air, train, or other public transportation. The expenses are eligible for reimbursement based on the actual amount spent or as per the limits set by the employer or tax authorities.
• Leave period: LTA can be claimed for travel during the employee's leave period, which may include annual leave, casual leave, or any other form of approved leave.

The procedure to claim LTA may vary depending on the employer's policies and procedures, but here are the general steps that most employees need to follow:

• Check your eligibility: Ensure that you are eligible for LTA and have completed the required years of service with your employer. Check the LTA rules and regulations specific to your employer.
• Plan your travel: Plan your travel in advance and select the mode of transport you wish to use. Keep all the relevant documents related to your travel, such as tickets, boarding passes, and invoices.
• Apply for LTA: Fill out the LTA application form provided by your employer and provide all the relevant details of your travel, such as the date of travel, destination, mode of transport, and cost incurred.
• Submit proof of travel: Along with your application form, submit all the relevant documents such as tickets, boarding passes, and invoices that prove your travel. These documents serve as proof of your LTA claim.
• Await approval and reimbursement: Your employer will verify your LTA claim and, once approved, reimburse the amount claimed as per their policy. The reimbursement may be processed as part of your regular salary or as a separate payment.

Q: If the employee takes one journey in the block of 2022-23, by when should the unclaimed LTC be claimed in the next block?

A: The unclaimed LTC exemption should be claimed within the year 2025 if it is carried forward to the next block.

Q: Is LTA exemption available in the new tax regime applicable from the financial year 2022-23?

A: No, LTA exemption would not be allowed under the new tax regime, which is applicable from the financial year 2022-23.

Q: If the employee's parents-in-law travel with him, would the travel costs for the parents-in-law be claimed as an exemption?

A: No, LTA exemption cannot be claimed for travel costs of parents-in-law.

Q: Which section of the Income Tax Act allows an exemption for LTA?

A: Section 10(5) of the Income Tax Act, 1961 allows LTA exemption.

Q: If the boarding pass is lost, can LTA be claimed?

A: LTA can be claimed if the boarding pass is lost. However, allowing LTA exemption would depend on the employer and the availability of other proofs.

Q: If the employee's wife travels with him, would her travel costs be allowed as an exemption?

A: Yes, the travel costs of spouses can be claimed under LTC exemption.

Q: Can only the travel costs of the family members be claimed as LTA if the employee does not travel?

A: No, if the employee does not travel, no LTA exemption would be allowed even if the family members travel.

Q: What would happen if the employee did not travel in a block of four years?

A: If the employee does not travel in a block of four years, LTA exemption would not be allowed. However, one unutilized LTA can be carried forward to the next block.

Q: Can return airfares on international trips be claimed under LTA?

A: No, international travel is not covered under LTA, and return fares on such travel would not be allowed as an exemption.

Q: Can I claim LTA exemption twice in one financial year?

A: No, only one LTC exemption can be claimed in one financial year. If you have taken two trips within the same financial year, the exemption would be allowed only on one trip.

Leave Travel Allowance (LTA) is a valuable tax benefit that allows employees in India to save taxes on travel expenses incurred during their vacations. By understanding the rules and regulations surrounding LTA, employees can make the most of this tax-saving measure. Employers, on the other hand, should ensure that LTA is properly implemented and administered to benefit their employees. With the comprehensive information provided in this guide, both employees and employers can navigate the world of LTA exemption with confidence.

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What is leave travel allowance (lta).

Leave Travel Allowance (LTA) is an allowance provided by employers to employees to cover their travel expenses incurred during leave periods for vacation purposes.

How does the exemption for Leave Travel Allowance (LTA) work?

Under the Income Tax Act, employees can claim tax exemption on the amount received as Leave Travel Allowance (LTA) for travel expenses incurred for themselves and their family members, subject to certain conditions.

What are the conditions to claim LTA exemption?

To claim LTA exemption, the travel must be undertaken within India, the employee must be on leave, and the travel expenses must be incurred on transportation (air, rail, or bus fares) to the destination and back.

Can LTA exemption be claimed for international travel?

No, LTA exemption is only applicable for travel undertaken within India. Expenses incurred for international travel are not eligible for LTA exemption.

Is there a limit to the LTA exemption that can be claimed?

Yes, LTA exemption is limited to the actual travel expenses incurred by the employee for himself/herself and eligible family members on the journey. The exemption is subject to the rules and limits specified by the employer's policy and the Income Tax Act.

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Written by admin • December 21, 2023 • 11:08 am • Payrolling

Leave Travel Allowance (LTA) – Rules, Claims, Exemption and Eligibility

Table of Contents

Leave Travel Allowance (LTA) is a financial benefit for all employees. It helps cover domestic travel expenses for two trips in a block of four financial years. The LTA amount is tax-free. It is one of the best tax-saving tools available to an employee. It is a tax exemption employers offer to their employees.

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance is an allowance employers offer their employees for domestic travel. This allowance allows employees to take a vacation where travel costs are tax-free. LTA is available for any two years within a four-year block. Employees must submit the bills and travel documents to their employer to take advantage of the LTA tax benefit.

People who can Claim Leave Travel Allowance (LTA)

Only employees and their spouses, children, dependent siblings and parents can claim LTA. This exemption does not apply to more than two of an employee’s children if they are born after October 1 1998.

Rules for Claiming LTA

The rules for claiming LTA are as follows:

• LTA does not cover international travel. Employees can only use domestic trips to make the claim.
• The employee’s family members are also allowed to use LTA to cover the cost of their travel. The family members for this purpose include spouses, up to two children(if born after October 1 1998), dependent parents and siblings.
• The employee’s salary structure must mention the LTA.
• Only the cost of travel is taken into consideration for tax exemption. No other expenses like hotel accommodation, food, or shopping qualify for this exemption.
• An employee can claim LTA two times in a block of four years.
• LTA can be claimed for travel by any mode of transport, like air, train, or road.
• If LTA isn’t claimed in a particular block of four years, it can be carried over to the next block.

Eligibility for Leave Travel Allowance (LTA)

Only the cost of travel of an employee is eligible for claiming LTA. Expenses such as local sightseeing, hotel accommodation, food, shopping, etc., are not eligible for this exemption. If the LTA provided by the employer is less than the actual cost of travelling, the exemption will be limited to the LTA amount specified by the employer rather than the actual cost.

For example, if the employer offers an LTA of Rs. 25,000 and the employee’s travel costs Rs. 35,000, an LTA exemption can only be claimed for Rs. 25,000.

LTA Exemption for Various Modes of Transportation

• Travel by air: If an employee travels by air, the exemption would be the economy class airfare by the shortest route to the travel destination.
• Travel by train:  If an employee travels by train, the exemption would be the fare of an AC first-class train ticket for the shortest route.
• Travel by other modes of transportation: If the destination is not connected by air or train, the exemption would be the fare of an AC first-class train ticket for the distance of the journey for the shortest route, whether connected by train or not.

LTA for Multi-Destination Trips

If an employee goes on vacation and visits multiple cities, in that case, the exemption will cover the cost of round-trip travel from their home city to the farthest city they visit and back. In other words, the LTA will cover the most expensive leg of their journey.

For example, suppose the employee resides in Delhi and travels to Mumbai, Goa, and Chennai for vacation. In that case, round-trip travel from Delhi to Mumbai is Rs. 4,000, from Delhi to Goa is Rs. 5,000, and from Delhi to Chennai is Rs. 7,000. In this scenario, the LTA exemption would be Rs. 7,000, which is the cost of the round-trip travel from Delhi to Chennai and back. Even though the employee visited multiple cities, the LTA will cover the expense of the farthest city visited and the return journey, which in this case is Chennai.

Claiming LTA in case of a Job Change

An LTA exemption would be available even if an employee changes their job. If the change happens within the block and there is any unutilized LTA, it can be claimed with the new employer. However, if the employee has already availed of the LTA, it would not be allowed by their new employer.

Unclaimed LTA

LTA exemption is available for two trips in a block of four years. However, if the employee does not take two trips within the four-year block, only one unutilized LTA is carried forward to the next block of years. However, to claim the unutilized LTA, the employee must take a trip in the first calendar year of the next block; otherwise, it will expire.

LTA Exemption for Vacation on Holiday

Under the Income Tax Act 1961, the LTA exemption is only allowed when an employee applies for a leave from work and then travels on vacation. Employees who take their vacation on official holidays or weekends cannot claim LTA.

Documents Required for Claiming LTA

Documents like the LTA form and proof of travel, such as tickets and boarding passes, are required to claim LTA.

Procedure to Claim LTA

Every employer announces the due date before which employees can claim LTA and may ask employees to submit proof of travel, such as tickets, boarding passes, invoices provided by travel agents, etc., along with the mandatory declaration. Though employers don’t need to collect proof of travel, it is always prudent for employees to keep copies for their records and submit them to the employer based on the company’s LTA policy or to the tax authorities on demand.

It is crucial for employees to meticulously document their travels, be aware of submission deadlines, and stay up to date with any changes in regulations. Understanding LTA  provides potential tax savings and the opportunity to explore new destinations. As you embark on your next adventure, confidently navigate the roads, armed with the understanding of how to make the most of your Leave Travel Allowance. Safe travels!

FAQs about Leave Travel Allowance (LTA)

What does leave travel allowance cover.

Leave Travel Allowance covers the travel expenses incurred during a trip.

How many times can an employee claim Leave Travel Allowance?

An employee can claim LTA only twice in a block of four years.

Is international travel covered under Leave Travel Allowance?

No, international travel is not covered under Leave Travel Allowance.

Which section of the Income Tax Act allows an exemption for LTA?

Section 10 (5) of the Income Tax Act, 1961 allows LTA exemption.

If an employee’s parents-in-law travel with him, would the travel costs for the parents-in-law be claimed as an exemption?

No, LTA exemption cannot be claimed for travel costs for the parents-in-law of an employee.

Can only the travel costs of the family members be claimed as LTA if the employee does not travel?

No LTA exemption would be allowed if the employee does not travel, even if their family members travel.

What would happen if the employee did not travel in a block of four years?

LTA exemption is prohibited if the employee does not travel in a block for four years. However, one unutilized LTA can be carried forward to the next block.

Can I claim an LTA exemption twice in one financial year?

No, only one LTA exemption can be claimed in one financial year.

What is the latest block period to claim LTA exemption?

The latest block period to claim LTA exemption is from January 1 2022, until December 31 2025.

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How to claim lta from your employer.

Before availing of the tax benefit on LTA, there are, however, certain other important conditions attached to it. Read on to know them. Do keep in mind that tax exemption on LTA can be claimed in the old tax regime only for FY 2021-22.

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How To Claim LTA For A Multi-destination Journey

You need not worry if you are planning a multi-destination journey with your family. To claim LTA, travel need not be from one destination to the other. If you visit multiple places one after the other, LTA can be claimed for the journey from the place of origin to the farthest point you travel to by the shortest route. Just make sure to keep all travel proofs handy.

Making Journeys In A Block

LTA is provided for two travels made in one block. If you claim only one LTA in a block then the remaining LTA can be carried forward. However, it has to be claimed in the first year of the next block. Hence, in one block an employee can claim a maximum of three LTAs.

LTA forms an integral part of our salary structure as the concession is provided by the government to encourage employees to travel. So plan your travel well and spend some quality time with your family and enjoy your vacation well.

BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for Credit Card , Personal Loan , Home Loan , Car Loan , and insurance.

The post Confused About How To Claim LTA? Here’s Everything You Need To Know appeared first on BankBazaar - The Definitive Word on Personal Finance .

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Home » Job Tips » Salary » Leave Travel Allowance

What is LTA? – Eligibility Criteria, Process, Calculation, & More

Introduced in 1986, the LTA scheme was initially rolled out for the government and public sector undertaking employees in India. Later, private sector employees were included in it too. Since then a number of employees have utilized the LTA scheme for their travel expenses. If you are a salaried employee going on leave soon, make sure you are well-versed with LTA.

This blog will help you understand what is LTA , the eligibility criteria to claim it, the procedure, conditions, and documents required, and even the restrictions and benefits of LTA.

Table of Contents

What is Leave Travel Allowance (LTA) in Salary ?

Leave Travel Allowance or LTA is an allowance that employers pay to their employees when the latter is on leave and traveling, either alone or with family within India. The amount paid to the employee as LTA is tax-free subject to certain conditions. 

The conditions and amount of the leave travel allowance are given in Section 10(5) of the Income Tax Act, 1961 along with Rule 2B of Income Tax Rules. It is important to note that employees who have opted for the new tax regime are not eligible to claim LTA. Learn personal finance to expand your knowledge on taxation and savings to manage your finances better.

Eligibility Criteria for LTA Exemption

The eligibility criteria that the employees must meet to claim leave travel allowance are as follows:

• The exemption is for salaried employees who have incurred expenses on travel. 
• The travel destination must be within India since international travel is not included in the exemption.
• Only those employees who have taken a leave from work for the purpose of travel can make an LTA claim . 
• Employees can claim LTA for a maximum of two journeys undertaken in a block of four calendar years. The current block of travel is from 2022 to 2025.
• Employees should possess proof of travel expenses in the form of boarding passes, hotel bills, etc. 
• LTA exemption can be claimed only within the specified period, after which it is deemed to lapse. 

Procedure to Claim LTA

The procedure to claim LTA is simple. Follow these steps to claim LTA in salary:

• Check Your Eligibility- Ensure you are eligible to claim LTA according to your employer’s policies as well. There is a minimum number of years of service requirement, specified by the employer before you can claim any exemption. Hence, check it before applying for LTA. 
• Plan Your Travel- To avoid any last-minute problems, make sure to plan your travel and keep proof of every travel expense, especially the tickets and the boarding passes. 
• Apply for LTA- In the LTA application form provided by the employer, fill out all the details such as date of travel, mode of travel, destination, costs incurred, number of family members, etc.
• Attach Relevant Proof Documents- Attach the travel proofs that you have collected with your LTA application. 
• Await Approval and Reimbursement- Now all you have to do is wait for your LTA claim application to be approved and then the reimbursement. Employers can either combine the LTA allowance with the salary or as a separate payment for reimbursement.

NOTE: An important point that the employees should keep in mind is that if only one LTA is claimed out of two within the block year, then the employee can claim the unused one in the next block. But this travel journey has to be made in the first calendar year of the next block, after which the unutilized LTA will expire. 

Documents Required for LTA Claim

The following are the documents required to be submitted by salaried employees to their employers:

• Travel tickets (for train, road, or air)
• Proof of expenses such as boarding passes, hotel bills, cab receipts, etc. 
• Leave approval application showing that the leave was taken to travel.
• LTA form duly filled in by the employee, detailing the exempt amount being claimed. It is provided by the employer. 
• Travel itinerary that outlines the places traveled and the duration of travel.
• PAN card details of the employee are to be provided to the employer. 
• Bank account details for receiving reimbursement for travel expenses.

Conditions for Claiming LTA

There are certain conditions that the employees must fulfill to claim LTA. These are as follows:

• The employee must actually travel to claim LTA.
• The family members covered under the rules are spouses, children, dependent parents, and dependent siblings. They must be traveling with the employee and not separately.
• The salary structure of the employee must contain LTA components.
• Only two children born on or after 1st October 1998 are covered under the exemption. There is no restriction regarding children born before this date. 
• The LTA claim can be made for any mode of travel, that is, by road, train, or air. 

LTA Exemption Rules for Various Modes of Transport

LTA covers the various modes of transport for travel. Refer to the given table to understand the exemption rules for different modes of transport:

How is LTA Calculated?

Here are the steps followed to calculate the LTA:

• First employee’s eligibility is checked based on the conditions prescribed in the employer’s policy and IncomeTax Act,1961.
• Then the cost of travel for the employee and their family members is calculated. 
• Now the maximum LTA exemption is calculated. The calculation is based on the fare for the shortest route to the destination by economy class of the national carrier. 
• Note that if the cost of travel is less than the maximum LTA calculated, then an exemption can be claimed for the actual cost of travel.
• But if the cost of travel is more than the maximum LTA calculated, then an amount only up to the maximum LTA exempt amount can be claimed. The excesses can be claimed as taxable income. 
• Once we have the final amount after all the calculations, the exemption amount is deducted from the employee’s taxable income.

LTA Claim Restrictions

Though LTA is a beneficial tax exemption for employees, there are certain restrictions as well. These are:

• LTA can be claimed only for domestic travel, that is, within the country, and not on international travel.
• The number of times you can claim LTA is limited. 
• Employees need to maintain proof of travel which can be a task for some.
• LTA exemption covers only the actual travel expenses and not the other expenses such as hotel accommodation and food bills. 
• No LTA can be claimed can be made on cash payments. You will only get an LTA allowance on payments made through bank accounts online, cheques, or any digital payment mode . 

Benefits of LTA

The following are some important benefits of LTA in salary:

• LTA is an essential source of saving tax.
• It encourages tourism and aids the travel industry.
• It also helps in cost optimization as the employees do not have to spend much. They also plan to keep in mind the allowance they will receive and the best options they have for other expenses. 
• LTA plays a role in maintaining the work-life balance as the employees can travel with their families and spend some time with them. 
• The LTA exemption claim is also flexible as it includes the travel expenses of the accompanying family members as well. Also, you can choose the mode of travel according to your requirement since all three–train, air, and road are covered under LTA. 

We have discussed what is LTA , the eligibility to receive LTA allowance, the procedure to claim LTA, the documents required, the conditions to be met, how it is calculated, and the restrictions and benefits of LTA. All of this information will help you in proceeding with your LTA application comfortably.

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Leave Travel Allowance (LTA)

The Income Tax Act, 1961 gives different exemptions to salaried class apart from deductions like LIC premium, housing advance revenue and so on While the deduction is a reduced thing from a total taxable income, exemption implies exclusion from total taxable income. Such exemptions empower the employers to structure the Cost to Company (CTC) of employees in a tax-efficient way. One of such exemptions accessible to salaried class under the law and furthermore generally utilized by employers is Leave Travel Allowance (LTA)/Leave Travel Concession(LTC). LTA exclusion is likewise accessible for LTA received from previous manager w.r.t travel after the retirement of service or end of service

• What is LTA?

Leave Travel Allowance Benefits

Conditions for claiming leave travel allowance, eligible lta exemption, exemptions on various modes of transport, leave travel allowance exemption rules, can leave travel allowance exemption be claimed on every vacation, procedure to claim leave travel allowance, multi-destination journey, carryover concession for leave travel allowance, lta in case of job switch, documents needed for claiming leave travel allowance.

As it is clear from the name it is an exemption for allowance or assistance which is received by the employees from his employer for traveling on leave. It may sound very easy but many things are needed to be kept in mind while planning the travel for claiming leave travel allowance exemption. Various provisions are available in income tax act which lays down provisions for claiming exemption of leave travel allowance.

Leave Travel Concession or allowance is an essential part of the salary structure and also acts as a great tax saving tool under the provisions of the Income Tax Act,1961.

• The first benefit of Leave Travel Allowance is that it is an addition to the basic salary. The entitlement is based on various factors like designation, pay scale, position, etc.
• An employee will be only able to claim the benefits of Leave travel concession/ leave travel allowance if the employee has Leave Travel Allowance entitlement and it part of the salary structure.

There are certain conditions or requirements which are needed for claiming exemption. The conditions are as follows:

• The actual journey is very essential to claim the exemption
• Only travel that is done domestically is considered for exemption which means travel within India. International travel is not considered under leave travel allowance
• The travel exemption is available for the employee alone or with the family. Her family includes the employee’s spouse, children, and wholly or mainly dependent parents, brother, and sister of the employee.
• This exemption is not accessible for more than two children of an employee who are born after 1 st October 1998.  Children who are born before 1 st October 1998 do not have this restriction.

The LTA exemption is only available on the actual costs which include air, rail, or bus fare which is incurred by the employee in his travel journey. No expenses which include sightseeing hotel accommodation, food, etc are included in this exemption. The exemption is also limited to the LTA which is provided by the employer

For instance, if the LTA provided by the employer is Rs.40,000 and the actual eligible travel cost which is incurred by the employee is Rs.20,000. In this case, the exemption is available only to the extent of Rs.20,000 and the balance which is of Rs.20,000 will be included in the taxable salary income of the employee.

• when the place of journey and destination are not connected by any type of recognized public transport then the eligible exemption, in this case, will be the amount which is equivalent to the air-conditioned first-class rail fare for the distance of the journey which shall be completed via the shortest route as if the journey has been performed by rail.
• when the place of the journey and the destination are not connected by rail partly or fully but are connected through recognized public transport then In this case the eligible exemption will be the amount restricted to first-class or deluxe class fare via the shortest route to the place of the final destination.
• when the place of journey and destination are connected via rail then the exemption which is eligible is the amount that is spent for any mode of transport available besides air which is restricted to air-conditioned first-class rail fare via the shortest route to the place.
• when the journey is performed by air then the exemption which is eligible will be the amount which is restricted to the air economy fare of the national carrier (Indian Airlines or Air India) via the shortest route to the final destination place.

Leave Travel Allowance exemption is accessible for travel allowance which is provided by the employer to the employee and his family. The exemptions are the following:

• Employees can travel to any place in India. International trips are not considered under this benefit.
• Leave Travel Allowance exemption is not considered if it is encashed without even traveling to any place. The whole Leave Travel Allowance amount will be taxable.
• The employee’s family can also travel without the employee and can still claim the exemption available under section 10(5). Family under this rule refers to the employee’s spouse, two children, siblings of the employees.
• The exemption is also available to the employee for traveling or retirement of his service.
• The cost of travel is only taken into view for exemption and no other amount is taken into consideration for the deduction.

The leave travel allowance can only be claimed for only two journeys which are performed in a block of four calendar years. So it means that it can not be claimed on every vacation.

Block year is not as same as the financial year it is different from the financial year. The government decides the leave travel exemption purpose. The first 4 block year started in 1986. The block years are 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-2005, 2006-2009, 2010-13, etc. the block that is applicable for the current period is the calendar year 2018-21.

The procedure which is needed to claim to leave travel allowance is employer-specific. Employer announces the last date in which the leave travel allowance can be claimed by the employees and which may require employees to furnish travel proof like a boarding pass, tickets which need to be provided by the travel agent with the mandatory certificate. It is not compulsory for employers to collect travel proof but it is always for employees to keep duplicates for their records and to also submit to the employer which is based on the leave travel allowance policy of the company or the tax authorities when demanded.

Income tax provision gives exemption w.r.t travel cost brought about on leave to any place in India. Conditions relating to the mode of transport likewise make reference to the spot of ‘origin’ to the spot of ‘destination’ and the route which should be the briefest accessible route.

Consequently, if a worker is traveling to better places in a solitary vacation, the exemption must be benefited for the travel cost qualified from the spot of origin to the farthest spot in the vacation by the most limited conceivable route.

Leave Travel Allowance (LTA) accompanies a carry forward highlight. You can carry forward your Leave Travel Allowance in the circumstance that it has not been utilized. It tends to be presented and guaranteed in the main year of the next block. Here we might want to make reference to that only one LTA can be presented and guaranteed in the principal year of the next block. For example, “the 4-year block for your LTA is 2014-2017. During that period, assuming you didn’t guarantee LTA or asserted it just a single time, you will be permitted to carry forward one LTA to 2018 (first year of next block, for example, 2018-21). Hence, from first Jan 2018 to 31st Dec 2021, you will actually want to guarantee LTA multiple times.

If an individual switches jobs he can still claim for leave travel allowance not only from the current organization but also from the previous employer if the concession is not unutilized. For instance, in the 2010-2013 block the individual claimed leave travel allowance in 2011 and in 2012 the individual switched his job. In that case the said individual can still claim his second journey from his new employer.

-To claim the benefit of leave travel concession or leave travel allowance the employee has to furnish the following documents to the employer:

-The first document which needs to be submitted is the Leave Travel Allowance Form

-Travel bills, boarding passes, flight or rail tickets, and other related documents.

When the Leave Travel Concession claim is submitted and is approved by the employer then the employer issues Form 16 which will contain all the necessary details of the allowance which is paid for. The other expenses which are incurred on travel will be taxable.

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Travel allowance: A Comprehensive Guide for Employees

• Written by: Rinaily Bonifacio
• Last updated: 11 March 2024

This article will explain travel allowance, when and how you can use it, and tips for getting the most out of your expenses.

Table of contents

What is travel allowance?

How does business travel allowance usually cover, what is a flat travel allowance, what is the daily allowance, easy ways on how companies manage their procedures for business travel allowances, effective communication, how to manage business travel allowances.

Travel allowance is a type of compensation employers provide to cover employee travel expenses incurred when traveling for business purposes. It helps with employee travel costs, such as transportation, lodging, meals, and other incidentals while on the job. Depending on the company policy, travel allowance may be given in cash or as reimbursed expenses.

For example, some companies provide a fixed daily amount for meals and lodging that employees can use during their travels. Other companies cover expenses incurred by employees when they submit receipts after their trip has ended. This is known as per diem allowance or transport allowance.

Business travel allowance typically covers the cost of airfare, hotel accommodations, and meals. It may also include per diem allowances such as ground transportation, parking, and incidentals. The exact coverage will vary depending on the company's policies and the type of business trip.

A flat travel allowance is a set amount of money an employee provides for travel costs. The employee is responsible for managing the funds and ensuring they are used for the intended purpose. This allowance is typically used for short trips or employees who travel infrequently.

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A daily allowance, also known as a per diem, is a set amount of money provided to employees for money incurred daily while traveling for business purposes. It typically covers things such as

• Transportation
• And incidentals.

The allowance amount is usually based on the location and duration of the business trip and is intended to cover living costs for that specific location.

Daily allowances are provided in addition to other travel compensation types, such as lodging or airfare reimbursement. The amount and coverage of a daily budget will vary depending on the company's policies and the nature of the business travel.

Companies can manage their procedures for business travel allowances by establishing clear guidelines and policies. This should include information on who is eligible for the assistance, what travel costs are covered, and how to submit expense reports. Additionally, companies can use travel management software to track and approve payments and ensure company policy compliance.

It is also essential for companies to communicate effectively with employees about travel allowance policies so that they are aware of their rights and obligations. This can include providing training and support and regular updates on any policy changes.

By managing their procedures for business travel allowances in a clear and organized manner, companies can ensure that their employees have the resources they need to complete their business trips while also managing the company's expenses.

Another critical aspect of managing business travel allowances is to keep an eye on the per diem rates and lodging expenses. It is essential to ensure that these expenses are within the budget and are in line with the rates established by the General Services Administration (GSA). Companies should also consider implementing a system for meal allowance and car hire reimbursement, as well as for laundry services, parking fees, and other miscellaneous expenses.

To manage business travel allowances effectively, companies should establish clear guidelines for employees traveling within the continental United States and those traveling to foreign countries. This includes setting a budget for each travel and providing employees with the necessary forms for expense reporting and reimbursement.

In addition, companies can use data analysis to identify trends and patterns in travel expenses. This can help them make more informed decisions about travel policies and budgeting and potentially save money on future trips.

It's also important to consider the needs of business travelers and their families and to establish policies that support them. For example, companies may offer additional allowances for family members traveling with a business traveler or for international travel.

Overall, an efficient reimbursement system and clear travel policies can help ensure that employees are promptly reimbursed for their expenses and that the company's expenses are tracked and managed effectively. This can be a great way to manage business travel allowances and keep costs under control.

Written by:

Rinaily Bonifacio

Rinaily is a renowned expert in the field of human resources with years of industry experience. With a passion for writing high-quality HR content, Rinaily brings a unique perspective to the challenges and opportunities of the modern workplace. As an experienced HR professional and content writer, She has contributed to leading publications in the field of HR.

Please note that the information on our website is intended for general informational purposes and not as binding advice. The information on our website cannot be considered a substitute for legal and binding advice for any specific situation. While we strive to provide up-to-date and accurate information, we do not guarantee the accuracy, completeness and timeliness of the information on our website for any purpose. We are not liable for any damage or loss arising from the use of the information on our website.

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Leave Travel Allowance: LTA sample format for claiming

Leave Travel Allowance: LTA sample format for claiming This is a sample LTA format for employees working for a private company or institute.

Dt. 15.05.20….

The Admin. Dept. / Dy. Director / Accounts

Eguardian, New Delhi  

Sub: Claim for LTA Amount

I have taken leave from dt. 20.01.2024 to dt. 27.01.2024 towards LTA for the year 2024 – 25 .

My travel expenses are as follows:

Total Travel Expenses – (Rs: Twenty Thousand Four Hundred Twenty Four Only)

Kindly reimburse me 100% Leave Travel Allowance (LTA) amount as per my eligibility.

Thanking you,

Marketing Manager

Eguardian – N. Delhi

Dt. 28.10.2024

Sample letter for Allotment of a family quarter in your company

                    January 28, 2024

The Director Eguardian

Sub: Allotment of a family quarter

This is with reference to my transfer (Ref. letter no: Nil, dtd. 20.01.2024) to Head office (Eguardian, New Delhi). As you know I am married and have a baby boy. I do not have any residence near the office. I am from Purnea, Bihar and it is more than 1500 km from New Delhi.

Therefore I request you to allow me a family quarter at Eguardian New Delhi quarters as  per the terms and conditions of the company I am ready to bear the expenses, for which I will be grateful to you.

Yours truly,

(M. Reza) Marketing Manager Grade: S-4

Jayada Janakari ke liye aap Jamia ke website pe visit kar sakte hai

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Sample Request Letter for Traveling Allowance – Letter to HR Requesting Travel Allowance

To, The HR Manager, __________ (Company’s Name) __________ (Company’s Address)

Date: __/__/____ (Date)

Subject: Request letter for travel allowance

Respected Sir/ Madam,

My name is ___________ (name) and I have been working in your company’s _________ (department) for last _________ (duration) and my employee ID is ________ (employee ID).

This is to inform you that I have been working in your company for last _______ (duration) and I have been availing the travel allowance for last __________ (duration) but due to ____________ (mention reason), I was not provided with the travel allowance. In this regard, it is to request you to kindly provide with the same as this will be good financial support.

I shall be highly obliged for your kind support.

Yours Truly, ________ (Signature), ________ (Name), ________ (Contact Number)

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Leave Travel Concession/Allowance (LTC/LTA)

Leave Travel Concession (LTC) is a type of benefit provided to employees by their employers to travel within the country during their leave period. The objective of this benefit is to encourage employees to take a break from work and explore new places while spending quality time with their family. The LTA/LTC scheme was introduced in the year 1986 by the Government of India to help employees working in government or public sector undertakings to travel and enjoy their time off. The scheme has since been extended to employees of private companies as well. Under the scheme, an employee can claim reimbursement for the travel expenses incurred during the leave period. The reimbursement is subject to certain conditions and restrictions, such as the distance of travel, the mode of transport used, the number of family members traveling, etc. The employee is required to submit the travel bills and other supporting documents to the employer to claim the reimbursement.

What is Leave Travel Allowance?

Leave Travel Concession (LTC) is a benefit provided by employers to their employees to travel within the country during their leave period. The objective of this benefit is to encourage employees to take a break from work and explore new places while spending quality time with their family.

Section 10(5) of the Income Tax Act, 1961 with Rule 2B ensures the exemption of tax and also details the conditions subject to tax exemption. Income tax provision has laid down rules for claiming exemption of LTC/LTA which are provided below.

Conditions for Claiming LTC/LTA

Let us understand the conditions/requirements for claiming the exemption.

• Actual journey is a must to claim the exemption
• Only domestic travel is considered for exemption, i.e., travel within India. No international travel is covered under LTC/LTA
• The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee.
• Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiple births on a second occasion after having one child is also not affected by this restriction.

Eligible LTC/LTA Exemption

The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation, food, etc., are eligible for this exemption. The exemption is also limited to LTC/LTA provided by the employer.

For example, if LTA granted by the employer is Rs 30,000, and the actual eligible travel cost incurred by the employee is Rs 20,000, the exemption is available only to the extent of Rs 20,000, and the balance of Rs 10,000 would be included in taxable salary income.

Exemption w.r.t various modes of transport

Procedure to Claim LTC/LTA

The procedure to claim LTA is generally employer specific. Every employer announces the due date within which LTA can be claimed by the employees and may require employees to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent etc., along with the mandatory declaration. Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit them to the employer based on the LTA policy of the company/to tax authorities on demand.

Frequently Asked Questions

Who is eligible for LTA?

LTA/LTC is usually available to employees of government or public sector undertakings, as well as employees of private companies who have been granted this benefit by their employers.  

What exactly does Leave Travel Allowance cover?

Leave Travel Allowance covers only the travel expense incurred during the travel.

Can LTA exemption be claimed for Vacation on Holidays?

Many organisations that go strictly by the wordings of the income tax provision are allowing employees to claim LTA only if the employee applies for leaves and travel during that time. Such organisations may reject LTA claims for travel on official holidays or weekends.

  How often can an employee claim LTA?

An employee can claim LTA/LTC twice in a block of four years. The current block of years is from 2022 to 2025.

What is the minimum trip duration under LTA/LTC?

According to Rule 8 of the Central Civil Services (Leave Travel Concession) Rules, 1988, an employee must undertake a journey of a minimum of three days to be eligible for the LTA/LTC benefit. The rule further states that the journey should be undertaken to a place that is different from the place of work and the employee’s residence. This rule applies to employees of the Central Government and is also followed by many State Governments and Public Sector Undertakings.

It is important to note that the LTA/LTC rules may vary for employees of private companies and other organizations. Employers may have their own guidelines and policies regarding the LTA/LTC scheme. Employees should check with their employer to understand the specific rules and conditions applicable to them.

How can an employee claim LTA/LTC?

To claim LTA/LTC, an employee must inform their employer about their proposed travel plans and apply for leave. The employee must then submit the travel bills and other supporting documents to the employer within a stipulated time frame. The employer verifies the documents and reimburses the employee for the eligible expenses.

What happens if an employee does not utilize the LTA/LTC benefit?

If an employee does not utilize the LTA/LTC benefit during the block of years, they can carry it forward to the next block of years. However, the employee must utilize the LTA/LTC benefit within the first year of the next block of years. If the benefit is not utilized within the stipulated time frame, it will lapse.  

Can LTA/LTC be availed for international travel?

No, LTA/LTC can only be availed for domestic travel within India.

Can an employee claim LTA/LTC for travel to their hometown?

Yes, an employee can claim LTA/LTC for travel to their hometown, provided that the hometown is located at a distance from the place of work and the employee’s residence.

Can an employee claim LTA/LTC for travel during their probation period?

Generally, employees who are on probation are not eligible for LTA/LTC. However, some employers may have their own policies on this and may allow employees on probation to claim LTA/LTC.

Can an employee claim LTA/LTC for travel by a private car?

Yes, an employee can claim LTA/LTC for travel by a private car, subject to certain conditions. The reimbursement amount is usually limited to the amount that would have been paid if the employee had travelled by public transport.

Can an employee avail of LTA/LTC for travel during the notice period?

An employee can avail of LTA/LTC during the notice period, provided that they have already applied for and obtained leave for the travel period before the notice period begins.

Can an employee claim LTA/LTC for travel to attend a family function?

No, an employee cannot claim LTA/LTC for travel to attend a family function, such as a wedding or a funeral. LTA/LTC can only be availed for travel during the employee’s leave period for the purpose of leisure travel.

Can an employee carry forward unutilized LTA/LTC to the next block of years?

Yes, an employee can carry forward unutilized LTA/LTC to the next block of years, but they must utilize it within the first year of the next block of years.

Can an employee claim LTA/LTC for travel to a foreign country if they travel by land or sea from India?

No, an employee cannot claim LTA/LTC for travel to a foreign country even if they travel by land or sea from India. LTA/LTC is only applicable for travel within India.

Can an employee claim LTA/LTC for travel during a period of leave without pay?

No, an employee cannot claim LTA/LTC for travel during a period of leave without pay. LTA/LTC can only be availed during the employee’s leave period.

Is there a limit on the amount that can be claimed under LTA/LTC?

Yes, there is a limit on the amount that can be claimed under LTA/LTC. The reimbursement amount is usually limited to the actual expenses incurred by the employee, subject to certain conditions and restrictions.

Can an employee claim LTA/LTC for travel expenses incurred for their dependents?

Yes, an employee can claim LTA/LTC for travel expenses incurred for their dependents, such as their spouse, children, and parents. However, there may be restrictions on the number of dependents who can travel.

Can an employee claim LTA/LTC for travel to multiple destinations?

Yes, an employee can claim LTA/LTC for travel to multiple destinations, provided that the total cost of travel does not exceed the eligible amount.

Can an employee claim LTA/LTC for travel to attend a business conference or seminar?

No, an employee cannot claim LTA/LTC for travel to attend a business conference or seminar. LTA/LTC can only be availed for leisure travel during the employee’s leave period.

Can an employee claim LTA/LTC for travel by a rented vehicle?

Yes, an employee can claim LTA/LTC for travel by a rented vehicle, subject to certain conditions. The reimbursement amount is usually limited to the actual rental charges paid by the employee.

Can an employee claim LTA/LTC for travel if they are on medical leave?

No, an employee cannot claim LTA/LTC for travel if they are on medical leave. LTA/LTC can only be availed during the employee’s leave period for leisure travel.

Can an employee claim LTA/LTC for travel during the first year of their employment?

Generally, employees who are in their first year of employment are not eligible for LTA/LTC. However, some employers may have their own policies on this and may allow employees in their first year of employment to claim LTA/LTC.

Can an employee claim LTA/LTC for travel if they have resigned from their job?

An employee can claim LTA/LTC if they have resigned from their job, provided that they have already obtained leave for the travel period before their resignation. The reimbursement amount will be subject to certain conditions and restrictions.  

Disclaimer:  This document is strictly private, confidential and personal to its recipients and should not be copied, distributed or reproduced in whole or in part, nor passed to any third party. The views expressed in this write-up are matters based on our understanding of the law and regulations prevailing as at the date of this write-up and our past experience with the tax, regulatory and other authorities as may be applicable. However, there can be no assurance that the tax authorities or regulators will not take a position contrary to our views.

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Name: Keshaba Palo

Qualification: ca in practice, company: palo & co, location: mumbai, maharashtra, india, member since: 06 feb 2020 | total posts: 2, my published posts, join taxguru’s network for latest updates on income tax, gst, company law, corporate laws and other related subjects..

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Sir, we are given to understand that the journey should be performed by State run public transport wherever available. But your article says that the journey can be performed by private taxi. Can you please clarify this sir? We find it difficult to convince our employees when our top management says one thing and articles like this say something else.

Can wrongly mentioned BLOCK YEAR be rectified

The time limit to generate e-invoice on IRP for all tax invoices issued is within seven days it is applicable on May 1st. What If my invoice Date is on April 30th I should generate an e-invoice on IRP within 7 days?

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Leave application by employee to employer to visit home town and apply for LTA

Format of Leave application by employee to the employer to visit home town and to apply for Leave Travel Allowance (LTA)/ Leave Travel Concession (LTC).

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Leave Travel Allowance (LTA) is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it. LTA is the remuneration paid by an employer for employee’s travel in the country, when he is on leave with the family or alone.

LTA amount is tax free. LTA is exempt from taxes under the income tax act. Given here are some interesting and relevant aspects about Leave Travel Allowance which you as a salaried employee must keep in mind. Exemption of Fare Only – LTA exemption can be claimed when the employer provides LTA to employee for leave to any place in India taken by the employee and their family.

Such exemption is limited to the extent of actual travel costs incurred by the employee. The total cost of stay and other expenses is not covered, only the travelling cost is covered.

Meaning of Family for LTA – The meaning of ‘family’ for the purposes of exemption includes spouse and children and parents, brothers and sisters who are wholly or mainly dependent on you.

Travel within India only allowed – Travel has to be undertaken within India and overseas destinations are not covered for exemption.

Exemption on Actual Travel Expense – For example, where an employer provides LTA of INR 40,000, but an employee spends only INR 30,000 on the travel cost, then the exemption is limited to only INR 30,000. Travel cost means the cost of travel and does not include any other expenses such as food, hotel stay etc.

Restriction on Number of Child for Claiming LTA – Exemption is not available for more than two children of an individual born after October 01, 1998.

This restriction does not apply in respect of children born before this date, and also in cases where an individual, after having one child, begets multiple children (twins or triplets or quadruplets, etc.) on the second occasion. The term “Child” includes a step-child and an adopted child of the individual.

Is exemption available every year?

No. The tax rules provide for an exemption only in respect of two journeys performed in a block of four calendar years.

The current block runs from 2014-2017. If an individual does not use their exemption during any block on any one or on both occasions, their exemption can be carried over to the next block and used in the calendar year immediately following that block.

In such cases, the journey performed to claim such exemption will not be counted for the purposes of regulating future exemptions allowable for the succeeding block. For example, Mr. X joins an organization on April 1, 2012 and is entitled to an LTA of Rs 40,000 per annum (financial year 2012-13). X undertook a journey in December 2012 and used his exemption. However, for his LTA entitlement for 2013-14, he did not undertake a journey during the calendar year 2013.

He can undertake the journey in 2014 to claim the exemption in relation to the LTA. He would also be able to use the LTA benefit for two other journeys which he can undertake in the current block 2014-17 in relation to his LTA entitlement for future years.

Proof of travel

Employers while assessing the travel allowance claims do not need to collect proof of travel to submit to the tax authorities.

Though it is not mandatory for employers to demand proof, they still have the right to demand documentary proof depending on its policy. The assessing officer can still ask for the employee to provide details of travel.

The individual however needs to keep copies for his or her own records. Such proofs are helpful at the time of the audit of the tax return of the individual.

Proof of travel could be, for example, tickets, boarding passes, invoice of travel agent, duty slip etc. Does claiming LTA in alternate years mean that the two year entitlement gets added together?

It does. If you are entitled to an LTA of INR20,000 per year and do not utilize it for the first year it is carried forward to the next year. In the second year you can claim the entire amount (INR40,000 i.e. 20,000 + 20,000) as tax exempt provided you spend it according to the specification in LTA tax laws as detailed above.

Carry over concession for Leave Travel Allowance – Leave Travel Allowance (LTA) comes with a carry forward feature. You can carry forward your Leave Travel Allowance in the situation that it has not been used. It can be brought forward and claimed in the first year of the next block. However the LTA claim can be brought forward and claimed only in the first year of the next block.

Can I Claim LTA Twice in a Year – Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other in case your spouse is also working.

LTA in case of Switch of JOB – If you switch jobs, you can get the LTA not only from your present organization but also from your former employer, if the concession is lying unutilized. Let’s say that, in the 2010-13 block, you claimed LTA in 2011.

In 2012, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.

LTA is often the most unutilized of exemptions but which can let you save huge amount of taxes if claimed. So this time make sure that your holidays not only give you that much needed break but also save you taxes.

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• Application Letter For Travelling Allowance

When it comes to business trips, conferences, project site visits, or research trips, it is often necessary for employees to request a travelling allowance to cover the associated expenses. To help you navigate this process smoothly, we have prepared four templates for writing application letters requesting a travelling allowance. These templates address different scenarios, including business trips, conference attendance, project site visits, and research trips. Each template is designed to clearly state the purpose of the travel, outline the estimated expenses, and emphasize the importance of the trip in achieving company objectives. It is crucial to customize these templates by including specific details such as the dates, location, purpose, and estimated costs related to the trip. By using these templates as a starting point, you can present a professional and persuasive request for a travelling allowance. Remember to adhere to your company's policies and guidelines regarding expense reimbursement and provide any necessary supporting documentation. With these templates, you can effectively communicate your needs, secure the financial support required for your travel, and contribute to the success of your organization.

Template Request for Travel Allowance for Business Trip

Subject: Request for Travel Allowance for Business Trip to New York

Dear Mr. Smith,

I am writing to request a travel allowance for my upcoming business trip to New York from June 25 to June 30. As you know, I will be attending the annual conference of the American Marketing Association as a representative of our company.

According to the company policy, I am entitled to a travel allowance of $200 per day for accommodation, meals, transportation and other expenses. The total amount of the travel allowance for this trip would be $1200.

I kindly request you to approve my travel allowance and process the payment as soon as possible. I have attached the conference brochure and the itinerary of my trip for your reference.

Thank you for your support and cooperation.

Jane Doe Marketing Manager

Template Application for Travel Allowance for Training Program

Subject: Application for Travel Allowance for Training Program in London

Dear Ms. Jones,

I am writing to apply for a travel allowance for the training program in London that I have been selected to attend. The training program is organized by the International Association of Business Communicators and will take place from July 10 to July 15.

The training program will provide me with valuable skills and knowledge that will enhance my performance and contribution to our company. I am confident that this opportunity will benefit not only me but also our team and our clients.

The cost of the training program is $1500, which includes the registration fee, the course materials and the certificate. The cost of the airfare, accommodation, meals and other expenses is estimated to be $2500. Therefore, the total amount of the travel allowance that I am requesting is $4000.

I kindly request you to approve my travel allowance and process the payment at your earliest convenience. I have attached the acceptance letter from the training program and the budget breakdown of my trip for your reference.

Thank you for your consideration and support.

John Doe Business Communication Specialist

Template Claim for Travel Allowance for Field Work

Subject: Claim for Travel Allowance for Field Work in Denver

Dear Mr. Lee,

I am writing to claim a travel allowance for my field work in Denver that I completed last week. As you know, I was assigned to conduct a survey on customer satisfaction and feedback for our new product line.

The field work involved visiting 20 retail stores in Denver and interviewing 100 customers over a period of five days. The field work was successful and I have collected valuable data and insights that will help us improve our product quality and customer service.

According to the company policy, I am eligible to claim a travel allowance of $150 per day for accommodation, meals, transportation and other expenses. The total amount of the travel allowance for this field work would be $750.

I kindly request you to approve my travel allowance claim and process the payment as soon as possible. I have attached the receipts of my expenses and the report of my field work for your reference.

Thank you for your guidance and support.

Mary Doe Market Research Analyst

Template Appeal for Travel Allowance for Medical Emergency

Subject: Appeal for Travel Allowance for Medical Emergency in Chicago

Dear Ms. Taylor,

I am writing to appeal for a travel allowance for a medical emergency that occurred during my business trip in Chicago last month. As you know, I was sent to Chicago to attend a meeting with one of our key clients on June 15.

Unfortunately, on June 16, I suffered a severe allergic reaction to some food that I ate at a restaurant and had to be rushed to the hospital. I spent two days in the hospital and received treatment and medication. The doctor advised me to rest for another two days before traveling back home.

Due to this unforeseen circumstance, I had to extend my stay in Chicago by four days and incur additional expenses for accommodation, meals, transportation and medical bills. The total amount of these extra expenses was $1800.

I understand that the company policy does not cover travel allowance for personal reasons or medical emergencies. However, I humbly request you to make an exception in this case and grant me a travel allowance of $1800 as a gesture of goodwill and compassion.

I sincerely apologize for any inconvenience or loss that this incident may have caused to our company or our client. I have attached the medical certificate from the hospital and the receipts of my extra expenses for your reference.

Thank you for your understanding and kindness.

Mark Doe Sales Manager

We are delighted to extend our professional proofreading and writing services to cater to all your business and professional requirements, absolutely free of charge at Englishtemplates.com . Should you need any email, letter, or application templates, please do not hesitate to reach out to us at englishtemplates.com. Kindly leave a comment stating your request, and we will ensure to provide the necessary template at the earliest.

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