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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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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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With new tax rules, Indian taxpayers can claim LTA exemption on foreign travel

Resham Sengar Resham Sengar / Times Travel Editor / TRAVEL TRENDS , INDIA / Updated : Jan 18, 2018, 17:42 IST

You're Reading

Blame it on the archaic Leave Travel Allowance (LTA) exemption policy for your inability to avail tax break on your CTC whenever you went on a foreign vacay until now. To our respite, we are now waiting with bated breath for the January 2018 Budget session of Parliament. Ask why? That foreign LTA-exempted foreign trip you've been pining for, if all goes well, will allow you to be exonerated by the hawk-eyed taxmen. Read less

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With new tax rules, Indian taxpayers can claim LTA exemption on foreign travel

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Explained: What is LTA and how it can help you save taxes

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LTA (Leave Travel Allowance): Meaning, Rules, Tax Exemptions and Conditions to claim

Hiral Vakil

Travelling offers a wide range of benefits. Taking time away from daily routine can reduce stress and improve mental and emotional well-being. However, vacations can be expensive. Income Tax provides various exemptions on such expenses to salaried individuals. One such exemption available is LTA i.e. Leave Travel Allowance. LTA is an allowance employers give to their staff for vacations in India.

LTA: Meaning

Conditions to claim lta exemption, leave travel exemption: eligibility, how to claim exemption on leave travel allowance.

Leave Travel Allowance is an allowance employers give to their employees as a part of CTC for travelling alone or with family to any place in India :

either on leave or
after retirement from service or
after termination of service.

Income tax has laid down rules for claiming exemption of LTA.

Section 10(5) of the Income Tax Act along with Rule 2B has prescribed the conditions and limit of exempt leave travel allowance.

Leave travel allowance should be a part of the employee’s salary structure.
An exemption is available for actual expenses incurred by the employee including their family for domestic travel only.
Spouse and children
Parents, brothers, and sisters who are wholly or mostly dependent on the employee.
Further, this exemption can be claimed for a maximum of two children born after 01/10/1998. For children born prior to this date, there is no restriction.
It covers only the cost of travel for the trip (travel by rail, air or any other public transport). It does not cover the cost of hotel accommodation, food, etc.
An exemption is available only for two trips in a block of four calendar years . The current block for leave travel is from 2022 to 2025.
If an exemption is not availed during the block period, it can be carried over to the next block and used in the first year of the next block.

Let’s understand with an example:

Let’s say, an employee does not avail Leave Travel allowance for the block of 2018-2021. He is allowed to carry forward a maximum of one unavailed LTA to be used in the succeeding block of 2022-2025. Accordingly, if he avails LTA in April 2022, the same will be considered for the block of 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 2022-2025.

The LTA exemption is available only on the actual travel costs. Expenses such as sightseeing, hotel accommodation, food, etc are not eligible for this exemption. It is also limited to the LTA provided by the employer. For example: If the actual expense incurred is INR 50,000 but LTA as part of Salary is INR 35,000 then the maximum exemption available would be INR 35,000 only.

Exemption when various modes of transport are used for travel

Employees can claim Leave Travel Allowance exemption by submitting details in Form 12BB . They should submit the proof in support of their claim. Further employees can submit boarding passes, air tickets, train tickets, invoices from travel agents, etc, as documentary proof to their employers.

No, LTA can be claimed only for domestic travel. You can only claim LTA if the Employer provides it as part of your salary.

If an employee travels to different locations on a single vacation then the exemption available will be for the travel cost eligible from the place of origin to the farthest location by the shortest route possible.

It depends on the organisation’s policies as many companies allow LTA exemption only if employees take specific leave for vacation and not on official holidays or weekends.

No, You can claim LTA exemption only twice in a block of 4 calendar years. The current block of four years is 2022-2025.

Employees are advised to maintain proof such as flight tickets, invoices from travel agents, passes, etc. as they have to be submitted to the employer.

Employees can know the exempt Leave Travel Allowance amount from Form 16 issued by the employer at the end of the financial year. It is exempt u/s 10(5) of the Income Tax Act.

Since Leave Travel Allowance is a part of salary income, an employee can file ITR-1 while claiming exempt LTA. However, salaried need to file ITR-2 if their income is more than Rs. 50,00,000.

Got Questions? Ask Away!

Hey @sushil_verma

There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens ) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA) , conveyance , transport allowance, medical reimbursement , etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).

Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).

As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

No issues. You’re welcome!

Hey @shindeonkar95

In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.

Hope, it helps!

Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?

There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?

I couldn’t find anything on this. Any help is appreciated.

Hello @Veejayy ,

Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.

Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.

These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!

Also, interest earned on these bonds will be taxable.

Hope this helps!

Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total

Hey @Sheirsh_Saxena , yes, the investment amount needs to be added under 80C.

Continue the conversation on TaxQ&A

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Guide to Leave Travel Allowance (LTA) for Indian Residents

Introduction.

LTA is designed to cover the cost of travel when an employee is on leave from work. It provides tax relief on travel expenses within India and covers only the travel costs. The tax exemption applies to the travel fare for the employee and immediate family members.

Eligibility for Claiming Leave Travel Allowance (LTA)

1. salaried employees.

LTA is available to salaried employees as part of their CTC. It is not eligible for self-employed individuals and business owners.

2. LTA Component in Salary

To claim LTA, it must be a part of your salary package. Check your salary structure to confirm if LTA is included.

3. Travel Criteria

Travel should be via the shortest route, and can be by rail, air, or public bus. Air travel exemption is limited to economy class fare of the national carrier.

4. Family Members Included

LTA covers travel expenses for the employee’s immediate family. The exemption for children applies only to two children born after October 1, 1998, unless born before this date.

Limits and Conditions for Claiming Leave Travel Allowance (LTA)

1. number of journeys.

The Income Tax Act allows exemptions on two journeys in a block of four calendar years. The current block is 2022-2025. This means within these four years, tax benefits can be claimed for two journeys.

2. Family Members Covered

LTA covers the travel expenses of the employee’s family, including spouse, children, and dependent parents, brothers, and sisters. Note: The exemption for children is limited to two children born after October 1, 1998.

3. Mode of Travel and Class of Travel

The exemption is applicable for travel via air, rail, or public bus.
For air travel, limited to the economy class airfare of the national carrier (Air India).
For rail travel, exemption equivalent to the AC first-class rail fare.
For other modes where rail or air is not available, AC first-class rail fare for the distance of the journey is considered.

4. Travel within India

The LTA exemption is only valid for travel within India. International travel is not covered.

5. Actual Expenditure

The tax exemption is allowed on the actual travel costs incurred, excluding expenses like accommodation, food, or sightseeing.

6. Proof of Travel

Proof of travel, such as tickets or boarding passes, must be provided to claim LTA. The proof should include the names of the employee and family members who traveled.

7. Carry Forward Provision

Unclaimed LTA in a particular block can be carried forward to the first year of the next block.

Role of Leave Travel Allowance (LTA) in Tax Planning

Introduction to lta in tax planning.

LTA allows employees to claim tax exemptions on travel expenses, playing a vital role in reducing taxable income and overall tax liability.

Strategic Use of LTA for Tax Savings

Optimizing the LTA Claim: Plan travel within specified blocks to fully utilize LTA benefits.
Claiming for Family Travel: Utilize LTA for travel expenses of immediate family members to maximize the exemption.
Documenting Travel Expenses: Keep detailed documentation like tickets and boarding passes for LTA claims.

Role in Annual Tax Calculation

Reduction in Taxable Income: LTA exemption deducts from the gross total income, lowering taxable income.
Smart Financial Planning: Incorporate LTA into annual financial planning for better tax-saving decisions.

Importance of Understanding LTA Rules

Staying Updated: Keep abreast of changes in tax laws and LTA regulations.
Compliance: Ensure compliance with LTA conditions to avoid legal issues or exemption denial.

LTA is a valuable tool in tax-saving. Wise use of LTA can lead to substantial tax savings, and understanding its rules is key to maximizing this benefit.

Latest Updates

No significant changes to LTA rules have been announced as of the last update. Employees should stay updated with any changes from the Income Tax Department. Discussions around relaxing certain LTA rules due to the COVID-19 pandemic have occurred but need official communication for implementation.

In conclusion, LTA serves as a valuable tool for tax savings, incentivizing travel and leisure for employees in India. Understanding its eligibility criteria, limits, and claiming process is crucial for effective tax planning.

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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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Leave Travel Allowance Exemption

Documents for leave travel allowance, calculation of leave travel allowance, how to claim lta, applicable lta deductions, travel limitations, lta eligibility, know leave travel allowance rules & exemption.

Leave Travel Allowance (LTA) is one of the best tax-saving tools that an employee can avail. The amount paid as LTA is tax-free, which is paid to the employee by the employer for travelling purpose. Let’s understand the concept of Leave Travel Allowance.

Well, the LTA is exempted from tax and the exemption is restricted only to the travel cost incurred by the employee. The tax exemption is not valid for the costs incurred during the entire trip such as dining, shopping and other expenses. Also, it is not exempted for more than two children of the individual born after 1st October 1998.

The Leave Travel Allowance is only allowed for two travels within a block of four years. In case, an individual doesn’t take advantage of the exemption, then you can carry forward it to the next block.

Check the list of expenses that is exempted under Leave Travel Allowance:

Air Travel- Economic airfare by the shortest route or amount spent will be exempted on whichever is lesser
Rail Travel- A.C first-class fare by the shortest route or the amount spent on travel whichever is lesser
Place of origin and destination place of journey connected by rail, but itinerary done by other modes of transport
Place of origin and destination not connected by rail (partly/fully), but connected by other public transport systems
Place of origin and destination not connected by rail or by public transport

Usually, employers don’t have to submit the proof of travel to the tax authorities. Even though it is not considered obligatory for the employers to collect the proof of travel from the employees. But they still have the right to demand for the proof, if needed. The employee is advised to keep proof of travel such as flight ticket, invoice of the travel agent, duty pass and other proof in case the assessing officer demand for it.

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As said earlier, an employee can make Leave Travel Allowance for two journeys in a block of four years. These block years are different from financial years and it is created by the income tax Department. In case, an employee fails to make any claims, then the exemption gets moved to the next year, but not to the next block. Only travel and ticket fare are considered as an exemption.

LTA is not a part of the salary structure. Before you claim the LTA you need to check your pay structure. The LTA amount can differ from each other. In case you are eligible for LTA you need to give tickets and bills to the employer.

Every company will formally announce the dates for LTA claims, then you have to fill the forms and attach the documents such as travel tickets or receipts.

LTA deductions are based on salary structure and it is exempted only to a certain extent. The LTA can be claimed under the following circumstances.

Air Travel- The exemption is allowed of tickets fares of a national airline’s Economy class
Rail Travel- The exemption is allowed for AC first-class tickets
Travel by other modes of transport- If the destination is not connected by air or rail, then an amount equivalent to first-class, AC first-class fare whichever is lower can be exempted under LTA

The LTA is only considered on the shortest route. If an employee is entitled to an LTA amount Rs. 30, 000 , but an individual can only claim for Rs. 20,000. The remaining Rs. 10,000 will be added to your Income which is accountable for the Tax Liability .

The below pointers are the travel limitations applicable under the Leave Travel Allowance:

Leave Travel Allowance only covers only domestic travel, you cannot claim an exemption for international travel
An individual should travel by either air travel, railway or public transport

LTA is not entitled to all employees, it is based on various factors such as grade, pay-scale etc. It is provided to travel within India where it is a round trip with or without family members.

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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How to Claim Your Leave Travel Allowance?
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Table of Contents

We all like traveling these days, don’t we? Every year we all plan to make at least one trip. But little do we know that we could claim one of the allowances if provided by your employer. It could also help you to save taxes too! But how do you claim it? Can you claim it every year? How much amount does it cover? What is included in this? Is there an eligibility criterion to claim this allowance?

Tax deductions and exemptions provided by the Income Tax department have allowed us to save the most amount of tax possible. By using these exemptions, employers can structure employee Cost to Company (CTC) in a tax-efficient manner. Leave Travel Allowance (LTA) is an exemption available to salaried workers under the law that is also widely used by employers.

When planning travel to claim an LTA exemption, many factors need to be considered. LTA exemptions are governed by income tax provisions:

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance (LTA) is an allowance provided by employers to employees who are on leave from work to cover their travel expenses. By the Income Tax Act, of 1; 961, LTAs are an important component of an employee’s salary, as they are eligible for income tax exemptions, making them a valuable tool for tax saving . LTA received by the employee during the year will not be included in his net income under Section 10(5) of the Income Tax Act.

Example of LTA

Assume that LTA granted by your employer is Rs 30,000, and the actual travel cost 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.

Take another example, suppose the Leave Travel Allowance provided by the employer is Rs 25,000. The actual expenses spent on travel are Rs 30,000. Here, the LTA exemption allowed would be Rs 25,000 irrespective of a higher amount spent on travel.

Benefits of Leave Travel Allowance

Tax Exemption : LTA provides tax benefits as the amount spent on eligible travel expenses is exempt from income tax.

Family Inclusion : The allowance covers immediate family members, promoting family travel and bonding.

Domestic Exploration : Encourages employees to explore different parts of India, contributing to tourism and cultural exchange.

Reimbursement : Allows reimbursement of actual travel expenses or up to specified limits, easing financial burden on employees.

Employee Well-being : Promotes work-life balance by facilitating quality time with family during approved leave periods.

Conditions to claim Leave Travel Allowance exemption

The following conditions must be satisfied for claiming an LTA exemption:

You can claim LTA for travel costs incurred for yourself and your family.
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.
Actual journey is a must to claim the exemption.
The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. Local conveyance, sightseeing, hotel accommodation, food, etc., are not eligible.
The exemption is also limited to LTA provided by the employer.
It applies to travel only within the country.

What is the eligibility of LTA exemption?

The LTA (Leave Travel Allowance) exemption for tax purposes is based on the actual travel cost. It covers expenses for a journey from the employee’s origin to the destination and back, using the shortest route by air, rail, or bus. Only the cost of travel tickets is eligible for exemption. Other expenses like conveyance, sightseeing, accommodation, shopping, and food are not allowed. If the employer’s LTA allowance is less than the actual travel cost, the exemption is limited to the employer’s provided amount.

Documents required for claiming LTA

To claim LTA, fill out the LTA application form supplied by your employer, including essential details like travel date, destination, mode of transport, and incurred costs. Alongside the application, submit supporting documents such as tickets, boarding passes, and invoices as evidence for your LTA claim. These documents are crucial to validate your travel expenses and support your application.

LTA Exemption Rules for Various Modes of Transport

The LTA claim depends on the mode of transport.

If travel is by air, the LTA limit is Actual Expenses or Economy class air fare of the national carrier by the shortest route to the place of destination, whichever is lower.
If travel is by rail, the LTA limit is Actual Expenses or first-class AC rail fare by the shortest route to the place of destination, whichever is lower.
If travel is by a recognized public transport system, the LTA limit is Actual Expenses or 1st class/ deluxe class fare by the shortest route to the place of destination, whichever is lower.
If no recognized public transport system is available, the LTA limit is Actual Expenses or first-class rail fare by the shortest route to the place of destination, whichever is lower. (It is assumed as if the journey had been performed by rail.)

How Much Leave Travel Allowance Exemption Will You Get?

There is a limit on how much LTA an employer may provide as an exemption. For instance, if Rs. 30,000 of LTA is granted by your employer and the actual travel cost incurred is Rs. 20,000 by an employee then the exemption will only be available till Rs. 20,000. Therefore the balance of Rs. 10,000 will be included in the taxable salary income. Procedure to Claim LTA

LTA claims are generally handled by employers. Employers announce the deadline for employees to claim LTA and may require employees to submit proof of travel along with the mandatory declaration, such as tickets, boarding passes, invoices from travel agents, etc. Although employers don’t need to collect proof of travel, it is always advisable for employees to keep copies for their records as well as to submit them to their employer on demand based on the LTA policy of the company.

What Happens to LTA If There is No Traveling Involved?

Because the LTA is part of your salary structure, it is automatically credited to your account regularly. If you do not travel or do not have valid proof of travel, you cannot claim the LTA received for tax exemption purposes. Your net taxable income will be increased if you receive an LTA.

What expenses can be included under LTA?

Under the Income Tax Act, LTA (Leave Travel Allowance) can include the following expenses:

Travel Expenses : LTA encompasses the travel costs for the employee and their immediate family members (spouse, children, and dependent parents or siblings). The travel can be by air, rail, or public transportation, following the employer’s or Income Tax Department’s specified rules.

Destination : LTA is applicable for travel within India. Employees can claim expenses incurred on traveling to any location in India during their leave period.

Mode of Travel : LTA covers expenses for travel by air, train, or other public transportation. Reimbursement is based on the actual amount spent or as per limits set by the employer or tax authorities.

Leave Period : LTA can be claimed for travel during the employee’s leave period, including annual leave, casual leave, or any other approved form of leave.

Unclaimed LTA

Unclaimed LTA is allowed to be carried forward. If an employee has not availed LTA exemption once or twice in a block of 4 years, he is allowed to carryover one exemption to the next block provided he avails this benefit, in the first calendar year of immediately succeeding block.

For example, during the 4-year block of 2014-2017, if you did not claim LTA or claimed it only once, then you will be allowed to carry forward one LTA to 2018 (first year of next block, i.e. 2018-21). Thus, from 2018 to 2021, you will be able to claim LTA three times.

Can Unclaimed LTA be Carried Over to the Next Block Year?

Under the carry-over concession rules, under which the employee can claim LTA tax breaks on three journeys made in the current block of years if he hasn’t claimed LTA in the last running block or has just claimed it once, the employee can still claim one additional LTA in the next block of calendar years. To utilize the carryover concession facility, one LTA exemption for the journey must be claimed during the first calendar year of the next block.

For instance, in the last block of the year, between 2018-2021, you made only one tax exemption claim under LTA as an employee. Therefore, you become eligible for LTA claims for up to 3 journeys in the current block, between 2022 and 2025. However, your first claim must be filed in the first calendar year of the current block, i.e. in 2022.

Also Read: Smart Tax Planning Strategies for High Earners

Leave travel allowance is an amount provided by the employer to the employee for Travelling while on Leave. This is a part of your salary which is exempted from tax.

Employees in India are generally eligible for LTA. To claim LTA, employees must undertake travel during their leave period, and the exemption is subject to specified conditions and limits set by the income tax regulations.

Under LTA, expenses related to travel within India are covered. This includes the cost of transportation by air, rail, or bus for the employee and eligible family members.

LTA can be claimed for two journeys in a block of four years and not on every financial year.

The concept of “block years” in the context of LTA (Leave Travel Allowance) refers to a four-year block set by the income tax authorities. This block consists of four consecutive calendar years, during which an employee is allowed to claim LTA for up to two trips.

No, LTA (Leave Travel Allowance) is specifically applicable for domestic travel within India.

For LTA exemption, the costs incurred for family members traveling with the employee are allowed. Family members include spouses, children, dependent parents, and dependent siblings.

The exemption can be claimed for up to two children if born on or after 1st October 1998.

LTA exemption is calculated as the least of the actual travel expenses incurred on a trip within India or the fare of the equivalent journey by the shortest route in the chosen mode of transportation (air, rail, or bus). Again, it is limited to the LTA component in your compensation package or CTC.

If an employee doesn’t travel at all or lacks valid proof of travel, they cannot claim LTA for tax exemption purposes. In such a scenario, the received LTA amount is treated as a part of the employee’s taxable income.

If an employee does not fully utilize their LTA entitlement in a particular block of four years, it can be carried over to the next block. But the employee is usually required to utilize this carryover LTA in the first calendar year of the immediately succeeding block.

If the unutilized LTA is not claimed within the first year of the next block, it will expire and would not be allowed to be claimed later on.

Yes, there is a specific deadline for employees to claim LTA. Usually, LTA can be claimed for exemption twice under the block of 4 years.

No, LTA (Leave Travel Allowance) is specifically designed for personal travel during leave periods and cannot be claimed for business trips or official travel.

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Leave Travel Allowance

Leave Travel Allowance (LTA)

Leave Travel Allowance (LTA) is an allowance paid by an employer to employees for travel within India, alone or with family. As understood, the allowance is only for travel expenses incurred. Thus, any overhead expense such as that for shopping, stay, food, etc, are not covered under this head. The LTA is tax exempted and its taxability falls under the Section 10(5) of the Income Tax Act, 1961 with Rule 2B.

The tax benefit is applicable only for the employee, and for two travels in a block of 4 years.
In case, you do not avail the exemption in the current block, then you can carry the benefit over to the next block.
The LTA tax exemption is extended to only two children of the employee. The children should have been born after 1 October, 1998.

In this post, we will discuss about list of exempted expenses from LTA, how to claim leave travel allowance, proof for travel,

List of Expenses Exempted Under LTA

Here is the required list:

Air Travel: The economic air fare by the shortest possible route or the amount expended is exempted, subject to whichever is the lowest.
Travel by Rail: A.C First Class fare by the shortest possible route or the amount expended is exempted, subject to whichever is the lowest.
Place of origin and destination spot of journey are connected by rail. However, the journey is undertaken by other transportation mode.
Place of origin and destination spot are not connected fully or partially by rail. But the same is connected through other recognized transport system (public).
Place of origin and destination not connected partially or fully by rail, and not connected through any recognized transport system (public).

How to Claim LTA?

When preparing the salary structure, Leave Travel Allowance is not a mandatory particular. But, if you are claiming LTA, then check for its presence in the pay structure.

The amount provided as allowance depends on the employer, and it may vary from an employee to another depending on the eligibility for this fund.
You may have to submit proof of tickets and bills to the employer to settle the claim.
The employer may let you know about when to raise the LTA claim and submit required proofs to the HR or the Accounts Department.
Usually, you are required to make the claim before the company calculates your tax liability.

Leave Travel Allowance Rules and Restrictions

Here are the limitations to the LTA:

You can avail the cost cover only for domestic travel in India and not international travel.
You can claim the expense for only travel and no other expenditures during the same.
You must keep the travel proof (tickets, bills, etc) to submit to the company for tax calculations or tax auditing reason.
The mode of travel allowed to avail the allowance is air, railway, or other modes of public transport.
You can claim LTA only two times in a block of four years.
If you do not claim the allowance in a particular block, the benefit of the same can be carried to the next block. But the exemption benefit or LTA must be used in the first year of the next block.
The leave travel allowance benefit is for the employee and his/her immediate family such as the spouse, children, dependent parents, and siblings.
The exemption is not available to more than 2 children that too they must be born after 1 October 1998. Children born before 1 October 1998 face no such restrictions. If more than one child is born in the second occasion of childbirth, then too this restriction does not make a difference.

Eligibility for LTA

It purely depends on the employer as to which employee he/she will provide the Leave Travel Allowance.

As an employee, your eligibility to get LTA depends on the pay-scale, position in company, other factors, and will of the employer.
To avail the allowance, you must take a leave and travel within India. It could be a one-way or round trip alone or with family members.

The LTA benefit is not entitled to all the employees, based on various factors such as grade, pay-scale, etc. an employer decides whether a certain amount can be allocated for LTA. In order to be eligible for the LTA, the employee should take leave and travel, the LTA is provided for travel within India where it is a round-trip with or without family members.

Documents to Claim Leave Travel Allowance

Here are the required documents:

To raise a claim to the employer/IT department, you must submit the LTA form and the travel proof/bill.
The employer and Income Tax Department do not have to verify the bills/tickets, but it is best to keep the boarding pass/tickets/other documents that can help you justify the LTA claim.

Leave Travel Allowance Calculation

From the above-given information, it is clear that the LTA deduction is for the shortest route between the origin and destination spot, and back. For instance, if you are eligible for Rs. 20,000 LTA, but have claimed only Rs. 10,000, then the LTA deduction will be of Rs. 10,000 only. The rest of Rs. 10,000 will be credited with your income, and shall the liable to applicable taxes.

You can avail Leave Travel Allowance for 2 journeys in a block of 4 years. The block years are decided by the Income Tax Department.
If you do not make a claim as per the given condition, then the exemption is moved to the following year, and not to the next block.
For exemption, only the ticket or travel fare is taken for exemption, and not any other expense.

NOTE: When raising a claim to tax authorities for LTA exemption, you do not have to submit proof of travel. However, you can always ask for the travel proof from your employer for safety. The proof of travel may include flight tickets, duty pass, boarding pass, etc. The employer may certify the domestic LTA claim and add it to form 16.

Frequently Asked Question about Leave Travel Allowance

Here are the LTA FAQs:

Several companies follow the provision of Income Tax Act strictly, and allow you to claim LTA only if the travel is undertaken in the period of the approved leave duration. If the travel is done on official holidays or weekends, then the organization may not accept the Leave Travel Allowance claim.

As per the Income Tax provision, you can avail LTA for travel cost for anywhere in India when on a leave. The mode of transport could be air, rail, or a public transport from the place of origin to destination on the shortest route. In case you have to travel different parts of India in a single vacation, then exemption is valid only for the travel cost from the origin spot to the farthest travel spot in vacation that too on the shortest route.

You can avail LTA exemption for only one trip in a financial/calendar year.

If you do not avail the exemption on LTA for one or two journeys in a given block of 4 years, then you can carryover the exemption in the next block. But, to claim the benefit, you have to complete the travel in the first calendar year of the block, after the succeeding block.

The exemption for Leave Travel Allowance purely depends on the LTA particulars in the compensation package. Thus, you can claim up to the LTA amount you are eligible in your package particulars after furnishing the travel proofs.

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Leave Travel Allowance (LTA)

TATA AIG Team
Published on :

In the hustle and bustle of our daily lives, taking a break from the monotony and exploring new horizons is essential for our well-being. Fortunately, certain organisations understand the significance of employee rejuvenation and offer various perks to facilitate it. One such benefit is Leave Travel Allowance (LTA), a unique offering encouraging employees to embark on memorable journeys.

LTA is a component of the salary package that enables employees to claim tax exemptions on their travel expenses within India. It allows individuals to plan trips with their families and experience the joy of exploration while enjoying financial benefits. However, navigating through the intricacies and maximising the benefits of LTA can sometimes be daunting.

In this blog, we will take you through the world of Leave Travel Allowance, exploring its nuances, benefits, and the steps involved in claiming it. We will also provide insightful tips and strategies to help you maximise this valuable employee benefit.

So, fasten your seatbelts and let’s uncover the hidden treasures of LTA that can make your travel dreams a reality!

What is Leave Travel Allowance (LTA)?

LTA full-form is Leave Travel Allowance (LTA), and it is a component of the salary package provided to employees in India, governed by the provisions of the Indian Income Tax Act. It is a special allowance that allows individuals to claim tax exemptions on the expenses incurred during domestic travel with their family.

Under Section 10(5) of the Income Tax Act, LTA enables individuals to claim exemptions for the expenses incurred on travel within India, subject to certain conditions. The exemption is available for the employee's travel expenses and their family members, typically dependent children, spouse, and parents, either residing with the employee or wholly dependent on them.

How is LTA Calculated in Salary – An Overview

The calculation of Leave Travel Allowance (LTA) in salary is based on certain factors and provisions set forth by the employer and the Income Tax Act in India. Its calculation in salary involves determining the taxable and non-taxable components.

Here is a general overview of how LTA in salary is calculated

LTA Amount The LTA amount is typically a fixed percentage of the employee's basic salary. The specific percentage can vary depending on the employer's policies or the terms of employment. Alternatively, it can be a fixed amount determined by the employer.

Salary Structure The LTA is part of the overall salary package. It is added to the employee's salary structure based on the agreed-upon terms. The LTA component may be specified separately or combined with other allowances.

Block Years LTA exemption is available for a maximum of two journeys undertaken in a block of four calendar years. The government pre-defines the block years or may be specified by the employer. The LTA calculation considers the block years to determine the eligibility and tax exemption limits.

Actual Travel Expenses LTA exemption limit applies to the actual travel expenses incurred by the employee and their eligible family members. These expenses include transportation charges such as airfare, train tickets, or road travel expenses. Only the actual expenses incurred are eligible for tax exemptions, and expenses like accommodation, sightseeing, or food are not considered.

Tax Exemption The LTA amount is exempted from income tax up to the actual travel expenses incurred or as per the limits specified by the Income Tax Act. The exemption is limited to the least of the following three amounts** ' Actual travel expenses incurred by the employee and eligible family members,

LTA amount received from the employer, or

Specified limits as per the Income Tax Act.

Supporting Documents To claim LTA exemptions, the employee must provide supporting documents such as travel tickets, boarding passes, travel agency bills, or any other documents the employer requires as proof of travel expenses incurred.

Eligibility Criteria to Avail LTA from the Employee

The eligibility criteria to avail of Leave Travel Allowance (LTA) from an employer can vary based on company policies and employment terms. However, certain common aspects determine an employee's eligibility for LTA. Here are some typical eligibility criteria**

Employment Tenure Employers often set a minimum tenure requirement for employees to be eligible for LTA. For example, an employee may need to complete a specific number of years of service, such as one year or more, before becoming eligible to claim LTA.

Permanent Employment LTA eligibility usually applies to employees on the company's permanent payroll. Depending on the employer's policy, contractual or temporary employees may not be eligible for LTA benefits.

LTA Policy Employers may have specific policies regarding LTA that outline the eligibility criteria. These policies might include minimum working hours per week or specific employment grades or levels that determine eligibility.

Travel with Family LTA primarily intends employees to travel with family members. While the definition of "family" can vary, it generally includes the employee's spouse, dependent children, and parents. Some employers may have specific criteria for including family members in LTA benefits.

Domestic Travel LTA is specifically meant for domestic travel within India. It does not cover international travel expenses. Employees must travel within the country to be eligible for LTA benefits.

Submission of Proof Employees must typically submit supporting documents to claim LTA as proof of travel expenses. These may include travel tickets, boarding passes, travel agency bills, or any other documents specified by the employer.

What Are the Conditions Behind Claiming LTA?

As discussed above, LTA, or Leave Travel Allowance exemption, is a tax exemption provided by employers in India to their employees for travel expenses incurred during vacations. Certain conditions must be fulfilled to claim LTA.

Firstly, LTA can only be claimed for travel within India. International travel expenses are not eligible for LTA exemption.

Secondly, LTA can be claimed for the employee's travel expenses and their family members, typically the spouse, children, and dependent parents or siblings.

Thirdly, LTA can only be claimed for the cost of transportation, such as airfare, train tickets, or bus fare. LTA does not cover other expenses such as accommodation, meals, or sightseeing.

Fourthly, LTA can only be claimed for two journeys in four calendar years. The government specifies these blocks; currently, the block is set from 2018 to 2021.

Lastly, to claim LTA, the employee must provide proof of travel, such as travel tickets or boarding passes. It is important to retain these documents as evidence for future reference.

Let’s take an example to understand this better:

You, as an employee of an organisation which offers LTA, plan a vacation with your family to Goa during the LTA block of 2022-2023. You book flight tickets for yourself, your spouse, and two children. You keep all the boarding passes as proof of travel expenses. Once you return, you can claim the LTA exemption for the cost of the flight tickets incurred during your vacation.

LTA Exemption Eligibility as Per the Indian Income Tax Act

The Eligible LTA (Leave Travel Allowance) exemption allows employees in India to claim a tax benefit on the LTA amount received from their organisation. The exemption is subject to certain conditions. Employees can claim the LTA exemption on the amount spent on eligible travel expenses, including transportation for the employee and their family within India.

The amount eligible for exemption is generally limited to the specified LTA limit set by the employer. For example, if an employee receives an LTA amount of ₹50,000 from their organisation and they spend ₹60,000 as travel expense for a trip, they can claim the exemption on the actual amount spent on eligible travel expenses up to the employer-specified limit, and the ₹10,000 will be included in their taxable salary income.

LTA Exemption Rules with Respect to the Different Travel Modes

LTA (Leave Travel Allowance) exemption in India is available for various modes of travel within the country. The exemption is subject to certain conditions and limits depending on the mode of transport chosen.

Here's an explanation of LTA exemption with respect to different modes of transport

Air Travel If an employee chooses air travel, the LTA exemption is available for the airfare paid for themselves and eligible family members. The exemption is limited to the economy class airfare of the national carrier or the amount actually spent, whichever is lower.

Train Travel For train travel, the LTA exemption can be claimed for the cost of train tickets purchased for the employee and eligible family members. The exemption is limited to the actual amount spent on train tickets or the entitled class fare, whichever is lower.

Bus Travel LTA exemption can also be claimed for bus travel expenses. The exemption is limited to the actual amount spent on bus tickets for the employee and eligible family members.

[Note Irrespective of the mode of transport chosen, the exemption is available only on the actual amount spent on transportation, and other expenses such as accommodation or meals are not eligible for LTA exemption.]

Can I Claim LTA Exemption on Every Vacation?

No, LTA (Leave Travel Allowance) exemption cannot be claimed on every vacation. Some certain restrictions and conditions determine the eligibility for claiming LTA exemption.

Here's a proper explanation

Block of Years LTA exemption is allowed in blocks of four calendar years, as the government specifies. These blocks are predetermined and may vary. For example, a block of 2018-2021 means an LTA exemption can be claimed for two journeys undertaken within this block. It is important to note that the block period is fixed and does not necessarily align with financial years or vacation periods.

Two Journeys Limit Within the specified block, an employee can claim LTA exemption for a maximum of two journeys. This means that irrespective of the number of vacations taken within the block, the exemption can only be claimed for a maximum of two trips.

Is There a Process of Carryover of Unclaimed LTA?

One or two trips' unclaimed LTA is carried over to the next block year. You must, however, submit your claim for the allowance during the block's first calendar year.

For instance, you only submit one LTA claim for the block period of 2018–2021. One unclaimed trip is now carried over to the block of years 2022–2025. There are now three LTAs available for you to use in this block. However, The carried forward claim needs to be submitted during 2022.

You can claim your deduction once you've calculated the amount and submitted your tax return. Any extra money paid for LTA is deducted from your pay. This is taxed according to your tax bracket.

What is an LTA Block Year in LTA Calculations?

In the context of LTA (Leave Travel Allowance) calculation, a block year refers to a fixed period of four consecutive calendar years determined by the government. This block period is pre-defined and determines the eligibility for claiming LTA exemption. Let's explain with an example:

Suppose the government has defined the block year as 2022-2025. This means the four-year period from 2022 to 2025 constitutes one block year. An employee can claim LTA exemption for two journeys within this block year.

Now, let's consider an employee named Ravi. Ravi plans to utilise his LTA for a vacation in the year 2020. He purchases flight tickets for himself and his eligible family members, and the expenses amount to ₹30,000.

Since the block year is 2022-2025, Ravi has two journeys within this block to claim LTA exemption. In 2024, Ravi takes his first journey and incurs travel expenses of ₹30,000. He can claim an LTA exemption for this amount.

In the subsequent years of the block period, i.e., 2025, Ravi has one more opportunity to utilise his LTA for another journey. If he plans and incurs eligible travel expenses during that year, he can also claim the LTA exemption for that journey.

However, if Ravi fails to utilise his LTA in the block year, the remaining entitlement will typically lapse, and he won't be able to carry it forward to the next block. The unclaimed LTA will not be eligible for exemption in the subsequent block year.

Employees need to understand the specific block years defined by their employer or as per government regulations. This understanding helps them plan vacations and claim LTA exemption within the specified block period, optimising their entitlement and tax benefits.

What Happens to Your LTA if You Do Not Travel at All?

If you don't travel or fail to submit valid travel bills for LTA (Leave Travel Allowance), the LTA amount received will be added to your net taxable income. LTA is a part of your salary structure and is credited to your account regularly.

However, you cannot claim it for tax exemption without actual travel or proper proof. Therefore, the unutilised LTA will be treated as taxable income, potentially increasing your tax liability. It's important to ensure that you meet the necessary travel requirements and maintain proper documentation to avail yourself of the tax benefits associated with LTA.

Is a Domestic Travel Insurance Plan Advisable While Planning a Trip Next?

It is advisable to consider purchasing domestic travel insurance when planning your next trip within your country. While domestic travel may seem less risky compared to international travel, and this kind of travel plan may seem irrelevant as compared to international travel insurance, unforeseen events can still occur, and having travel insurance can provide valuable coverage and peace of mind.

Here are a few reasons why a domestic travel insurance policy is advisable

Trip Cancellation or Interruption Domestic travel insurance can cover trip cancellation or interruption due to unforeseen circumstances, such as sudden illness, accidents, or emergencies. Tata AIG's travel insurance plans typically reimburse non-refundable trip expenses in such cases.

Medical Expenses You may still encounter unexpected medical situations while travelling domestically. Domestic travel insurance can cover medical expenses incurred due to illnesses or accidents during your trip. Our travel policies include coverage for medical treatment, hospitalisation, and emergency medical evacuation.

Baggage Loss or Delay Domestic travel insurance plans can provide coverage for baggage loss, theft, or delay. This ensures you receive compensation for essential items if your baggage is lost or delayed during your trip. Tata AIG's travel insurance offers reimbursement for baggage loss or covers the costs of essential purchases due to baggage delay.

Personal Liability Domestic travel insurance may include personal liability coverage, protecting you against third-party claims for property damage or bodily injury caused unintentionally during your trip. We provide personal liability coverage, giving you peace of mind in such situations.

24/7 Assistance Tata AIG's travel insurance plans typically come with round-the-clock assistance services. Throughout your trip, you can access emergency assistance, such as medical advice, concierge services, or travel-related information.

**Apart from these reasons, if you purchase a travel plan with us, we are known for our efficient and hassle-free travel insurance claim settlement process. We will offer a streamlined claims procedure in case of any covered loss or emergency during your domestic trip.

Our dedicated claims team provides guidance and assistance throughout the claims process. And we aim to ensure you receive the support you need during challenging times.

To Sum It Up

Understanding the conditions and limitations behind claiming LTA (Leave Travel Allowance) is essential for employees seeking tax exemptions on their travel expenses. Simply put, LTA can only be claimed for domestic travel within specified block years, with restrictions on the number of journeys and eligible expenses. Proper documentation and adherence to employer policies are crucial for maximising the benefits of LTA.

Additionally, considering the purchase of domestic travel insurance from us provides an added layer of protection against unforeseen events during domestic trips.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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Insurance is the subject matter of the solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure / policy wording carefully before concluding a sale. Trade logo displayed above belongs to TATA Sons Private Limited and AIG and used by TATA AIG General Insurance Company Limited under License. 2008, TATA AIG General Insurance Company Limited, all rights reserved. Registered Office : Peninsula Business Park, Tower A, 15th Floor, G.K.Marg, Lower Parel, Mumbai - 400 013, Maharashtra, India. CIN: U85110MH2000PLC128425. IRDA of India Regn. No. 108. Toll Free Number : 1800 266 7780 / 1800 22 9966 (only for senior citizen policy holders). Email Id – [email protected] . Category of Certificate of Registration: General Insurance.

2008, Tata AIG General Insurance Company Limited, all rights reserved. Registered Office : Peninsula Business Park, Tower A, 15th Floor, G.K.Marg, Lower Parel, Mumbai - 400 013, Maharashtra, India. CINNumber : U85110MH2000PLC128425. Registered with IRDA of India Regn. No. 108. Insurance is the subject matter of the solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure / policy wording carefully before concluding a sale. Trade logo displayed above belongs to Tata Sons Private Limited and AIG and used by TATA AIG General Insurance Company Limited under License. Toll Free Number : 1800 266 7780 / 1800 22 9966 (only for senior citizen policy holders). Email Id – [email protected] .

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COMMENTS

Leave Travel Allowance (LTA)
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 ...
Confused About How To Claim LTA? Here's Everything You Need To Know
LTA is only for domestic travels and does not cover international trips. LTA can be claimed by both the husband and wife in case both of them are working and the employer offers Leave Travel ...
Leave Travel Allowance (LTA)
Leave Travel Allowance covers only domestic travel and does not cover international travel. The mode of travel should be either air travel, railway or public mode of transport. Unclaimed LTA. Here are the following details regarding unclaimed LTA: Two journeys in a block of four years are eligible for LTA exemption.
Leave Travel Allowance Exemption: A Comprehensive Guide
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 ...
Leave Travel Allowance (LTA)
The employee's actual travel expenses, such as their bus, rail, or airline fare, are the only ones for which the exemption is granted. This exemption does not apply to costs for local transportation, sightseeing, lodging, meals, etc. Additionally, only LTA given by the employer is exempt. For instance, only Rs 20,000 will be available as an ...
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Leave Travel Allowance, for the unacquainted, is a useful tax-saving device an organisation offers to its employees. LTA is a wage paid by the employer to the employee when the latter is ...
Leave Travel Allowance (LTA): Eligibility & How to Claim?
Leave Travel Allowance (LTA) is a significant component of an employee's wage package because it reduces taxable income. Employers grant this allowance to cover staff travel costs. You can claim LTA for two journeys within a four-year block. While the allowance is exempt from tax under Section 10 (5) of the Income Tax Act, certain conditions ...
Leave Travel Allowance (LTA): Claim, Rules, Exemption ...
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 (spouse, children, and dependent parents or siblings). The travel can be undertaken either by air, rail, or public transportation, as per the specific rules defined ...
Leave Travel Allowance (LTA): Rules, Claim, Eligibility & Exemption
To avail the tax exemption, employees must submit proof of travel expenses, such as travel tickets and hotel bills. It is important to note that LTA can only be claimed for travel within India and does not cover international travel expenses. Note: A "block year" is a four-year period used for LTA (Leave Travel Allowance) exemption. It's ...
Explained: What is LTA and how it can help you save taxes
Leave Travel Allowance covers the employee's domestic travel only. It does not cover international travel. Furthermore, the mode of travel has to be either air travel, railway or a public mode of transport. More importantly, LTA cannot be claimed every year. It can only be claimed twice in a block of four years.
LTA: Meaning & Conditions to claim Exemptions- Learn by Quicko
It does not cover the cost of hotel accommodation, food, etc. An exemption is available only for two trips in a block of four calendar years. The current block for leave travel is from 2022 to 2025. ... Can I claim LTA on international travel? No, LTA can be claimed only for domestic travel. You can only claim LTA if the Employer provides it as ...
Guide to Leave Travel Allowance (LTA) for Indian Residents
LTA covers the travel expenses of the employee's family, including spouse, children, and dependent parents, brothers, and sisters. Note: The exemption for children is limited to two children born after October 1, 1998. ... International travel is not covered. 5. Actual Expenditure. The tax exemption is allowed on the actual travel costs ...
Leave Travel Allowance (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 ...
Leave Travel Allowance (LTA)- Rules, Eligibility & Tax Exemption
Leave Travel Allowance only covers only domestic travel, you cannot claim an exemption for international travel; An individual should travel by either air travel, railway or public transport ; LTA Eligibility. LTA is not entitled to all employees, it is based on various factors such as grade, pay-scale etc.
Leave Travel Allowance: Claim Rule, Eligibility, Tax Exemptions
Leave Travel Allowance (LTA) is a special allowance provided by employers to their employees when they take leave to cover their travel expenses. It's a significant component of your salary as it qualifies for income tax exemption under the Income Tax Act of 1961. According to Section 10 (5) of the Income Tax Act, the LTA received by you won ...
LTA Rules: How to claim Leave Travel Allowance?
Leave Travel Allowance (LTA) is a type of allowance which is provided by the employer to his employee who is travelling on leave from the work to cover his travel expenses. LTA is an important component of the salary of the employee as it is eligible for income tax exemption as per the Income Tax Act, 1961. Under Section 10 (5) of the Income ...
Leave Travel Allowance
More than two children born after October 1, 1998, are not eligible for the Leave Travel Allowance exemption. LTA can only be claimed twice in a four-year period. If LTA is not claimed in a specific block, it may be carried over to the next block and used in the first year of the next block. The LTA exemption also covers the individual's family.
Leave Travel Allowance Tax Exemption
It covers the cost of travelling expenses incurred during the trip and is one of the best ways to save taxes by the salaried employees. What type of travelling expenses does LTA cover in order to claim exemption while filling income tax return? In order to claim leave travel allowance exemption, the expenses should only be incurred for travelling.
What is LTA?
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 ...
Leave Travel Allowance (LTA)
For instance, if Rs. 30,000 of LTA is granted by your employer and the actual travel cost incurred is Rs. 20,000 by an employee then the exemption will only be available till Rs. 20,000. Therefore the balance of Rs. 10,000 will be included in the taxable salary income. Procedure to Claim LTA. LTA claims are generally handled by employers.
Leave Travel Allowance (LTA)
Leave Travel Allowance Rules and Restrictions. Here are the limitations to the LTA: You can avail the cost cover only for domestic travel in India and not international travel. You can claim the expense for only travel and no other expenditures during the same. You must keep the travel proof (tickets, bills, etc) to submit to the company for ...
Leave Travel Allowance (LTA)
It does not cover international travel expenses. Employees must travel within the country to be eligible for LTA benefits. ... LTA does not cover other expenses such as accommodation, meals, or sightseeing. Fourthly, LTA can only be claimed for two journeys in four calendar years. The government specifies these blocks; currently, the block is ...
Leave Travel Allowance (LTA)
The LTA does not cover international trips. One can travel anywhere in India. Leave Travel Allowance exemption is not applicable if an employee gets its cash without traveling to any place. In this case, the entire LTA amount becomes taxable.

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

What is Leave Travel Allowance (LTA)?

Who Can Claim LTA?

Conditions for Claiming LTA

Amount of LTA/LTC Exemption

Exemption w.r.t Various Modes of Transport

Carryover of Unclaimed LTA/LTC

Procedure to Claim LTA

Multi-Destination Journey

LTA Exemption for Vacation on Holidays

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Frequently Asked Questions

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Ektha Surana

Quick Summary

Leave Travel Allowance Exemption: A Comprehensive Guide

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?

Q: Is LTA exemption available in the new tax regime 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?

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

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

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

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

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

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

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

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Explained: What is LTA and how it can help you save taxes

LTA (Leave Travel Allowance): Meaning, Rules, Tax Exemptions and Conditions to claim

LTA: Meaning

Let’s understand with an example:

Exemption when various modes of transport are used for travel

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Participants

Guide to Leave Travel Allowance (LTA) for Indian Residents

Eligibility for Claiming Leave Travel Allowance (LTA)

2. LTA Component in Salary

3. Travel Criteria

4. Family Members Included

Limits and Conditions for Claiming Leave Travel Allowance (LTA)

2. Family Members Covered

3. Mode of Travel and Class of Travel

4. Travel within India

5. Actual Expenditure

6. Proof of Travel

7. Carry Forward Provision

Role of Leave Travel Allowance (LTA) in Tax Planning

Strategic Use of LTA for Tax Savings

Role in Annual Tax Calculation