Valuation of Leave Travel Allowance:-
Any amount received by employee from his employer in connection of his proceeding on leave to any place in/ outside India is exempted under this head subject to following:
i. Journey done by Air: Economy class national carrier via shortest route.
ii. Journey done by Railways: AC 1st Class fare via shortest route.
iii. Journey done by any other mode of transport: If recognized Public transport exists then 1st Class deluxe fare else amount equivalent to AC 1st class Rail fare.
PLEASE NOTE:
Leave travel allowance (LTA) is a common form of tax exemption given to the employees by most employers. Though it is quite simple, it often brings about a lot of questions among those claiming exemption on it.
In this article, we will answer the 10 most commonly-asked questions on LTA.
1. When can we claim LTA?
Tax exemption on LTA can only be claimed if you have applied for leave from your company for travel and if you actual make a journey.
2. What does LTA cover?
LTA covers only the cost of travel for the trip. Hotel accommodation, food, etc. cannot be claimed for exemption.
3. Whom does it cover?
LTA exemption covers you and your family. A family, under LTA, includes spouse, parents, siblings, and children. The cost of other relatives cannot be claimed.
4. How many times can we claim LTA?
LTA can be claimed twice in a block. The blocks are decided by government. They are 2010-2013, 2014-2017 and so on.
5. What type of transport does LTA cover?
LTA can be claimed for travel through rail, air or any other public transport. However, you should keep in handy the proof of travel as it may be needed by your employer.
6. Is International travel permitted?
No, LTA covers only domestic travel.
7. What is the maximum limit on LTA exemption?
LTA exemption is limited to the amount of LTA paid to the employee as part of the CTC. One cannot claim exemption beyond the actual LTA amount being provided.
8. Can a husband-wife duo claim LTA?
Yes, both the spouses can claim the exemption on LTA from their employers. However, both of them cannot claim for the same journey.
9. Can we carry forward LTA?
Yes. In case you have only claimed LTA for one journey in a block, you can make another journey in the first year of the next block and claim it. In such a case, 3 journeys can be claimed for the block in total.
10. Can LTA be claimed if the actual claiming person has not travelled?
No, LTA cannot be claimed for the family if you as a claiming person are not included in the travel.
Conclusion
LTA exemption is available for the shortest route travelled and can be availed only for travel on working days. You can also claim LTA while filing your taxes. Proofs are not needed by the I-T department initially, but it is always better to keep them handy.
Any amount received by employee from his employer in connection of his proceeding on leave to any place in/ outside India is exempted under this head subject to following:
i. Journey done by Air: Economy class national carrier via shortest route.
ii. Journey done by Railways: AC 1st Class fare via shortest route.
iii. Journey done by any other mode of transport: If recognized Public transport exists then 1st Class deluxe fare else amount equivalent to AC 1st class Rail fare.
PLEASE NOTE:
- In case of situation 3 above where journey performed by any other mode of transport, where in the place of origin of journey and destination are connected by railways. The amount of air condition first class rail fare by the shortest route OR the amount actually spent, whichever is less shall be exempted.
- Maximum exemption claimable is to the extent of Actual Expenditure subject to amount of L.T.C received.
- Exemption can be claimed in respect of TWO journeys in a BLOCK of FOUR calendar years.
- Exemption is available only in respect TWO Children.
- In case L.T.C is encashed without performing the journey, entire L.T.C becomes taxable.
- Family for this purpose includes- Spouse & Children of the Employee; Parents, brothers, sisters of the employee wholly/ mainly dependent on the employee.
- It is not necessary that family members should perform journey along with the Employee only.
- Only Travel Fare incurred for the shortest route is exempted and no other expenses.
Leave travel allowance (LTA) is a common form of tax exemption given to the employees by most employers. Though it is quite simple, it often brings about a lot of questions among those claiming exemption on it.
In this article, we will answer the 10 most commonly-asked questions on LTA.
1. When can we claim LTA?
Tax exemption on LTA can only be claimed if you have applied for leave from your company for travel and if you actual make a journey.
2. What does LTA cover?
LTA covers only the cost of travel for the trip. Hotel accommodation, food, etc. cannot be claimed for exemption.
3. Whom does it cover?
LTA exemption covers you and your family. A family, under LTA, includes spouse, parents, siblings, and children. The cost of other relatives cannot be claimed.
4. How many times can we claim LTA?
LTA can be claimed twice in a block. The blocks are decided by government. They are 2010-2013, 2014-2017 and so on.
5. What type of transport does LTA cover?
LTA can be claimed for travel through rail, air or any other public transport. However, you should keep in handy the proof of travel as it may be needed by your employer.
6. Is International travel permitted?
No, LTA covers only domestic travel.
7. What is the maximum limit on LTA exemption?
LTA exemption is limited to the amount of LTA paid to the employee as part of the CTC. One cannot claim exemption beyond the actual LTA amount being provided.
8. Can a husband-wife duo claim LTA?
Yes, both the spouses can claim the exemption on LTA from their employers. However, both of them cannot claim for the same journey.
9. Can we carry forward LTA?
Yes. In case you have only claimed LTA for one journey in a block, you can make another journey in the first year of the next block and claim it. In such a case, 3 journeys can be claimed for the block in total.
10. Can LTA be claimed if the actual claiming person has not travelled?
No, LTA cannot be claimed for the family if you as a claiming person are not included in the travel.
Conclusion
LTA exemption is available for the shortest route travelled and can be availed only for travel on working days. You can also claim LTA while filing your taxes. Proofs are not needed by the I-T department initially, but it is always better to keep them handy.
