Leave Travel Allowance
The exemption is available for any journey made by air, road or rail anywhere in India. You must take the shortest route to get the LTA benefit. If you’ve travelled to multiple destinations, the place that is farthest from your residence will be considered for calculating the exemption amount. Your organisation might reject the Leave Travel Allowance (LTA) claim, if you had travelled on official holidays, like on a weekend, from this year. The Income-Tax (I-T) Act says the employee needs to be “on leave to be in any other place in India”. LTA (Leave Travel Allowance), is a benefit provided by almost all employers to their employees which provide income tax benefit. One can claim LTA for two times in a block of 4 years. Employees would take leave, enjoy their travel and claim this as reimbursement where income tax is not deducted.
Leave Travel Allowance (LTA ) is one of best Tax saving tools available to employees.
As per the Rules, you can claim the LTA benefit only twice during the block of 4 years. For this purpose, following condition should be satisfied:
- You should be on leave.
- You should travel any where in India.
- During such travel you may have your family with you.
- LTA is part of your salary component.
Family includes spouse, children as well as dependent parents, brothers and sisters.
In respect of children born on or after 1.10.98, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births.
The travel expense incurred by you is exempt up to the LTA received.
Obviously, if your wife and other family members travel, without you accompanying them, no LTA can be claimed.
FAQ on claiming LTA benefit and Income tax planning is answered below:
1. Can we Claim LTA Every Year? Sumit, Delhi
One of the most common questions about LTA is whether it can be claimed every year or not? The answer is Yes – you can claim LTA every year, but you will not be able to claim LTA exemption ever year.
Other Points About Tax On LTA
a) If you do not wish to claim LTA in one particular year you can have your employer carry forward your LTA for the next year.
2. Is entire cost of travel covered under LTA? Jaya , Bangalore
A The entire cost of the holiday is not covered. Only the travel costs are covered. So, whether you fly, hop on to a train or take public transport, you will have to show the ticket to claim your LTA. This means you will need to keep your air, rail or public transport ticket.
Also LTA benefit is limited to LTA given by your employer in your salary.
3. Can I claim LTA for my elder Brother? Ramesh , Amritsar
A LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children.
For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
4. What is Concept of Block years for getting LTA benefit? Sunil, Pune
A LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2010-13 — January 2010 to December 2013.
During this time period, a person is entitled to two LTA claims.
5. I was not able to claim Leave in last block. Can I claim it now? Venkat, Kerala
A You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.
Let’s say you do not take your LTA in 2006-09. Or that you use only one LTA. Don’t worry, you will be able to take the pending LTA in 2010. This means that, in the 2010-13 block, you will be totally entitled to the three journeys.
6. I am entitled for LTA of Rs 45000/- but I have made travel of Rs 25000 /-. How can I claim balance? Kamal, Gurgaon
A If your LTA is not utilised, it gets added to your salary and you will be taxed on it.
Rs 20000/- short utilised would be paid as normal part of your salary after deducting income tax as per your Income tax slab.
7. I have changed job and i was not able to claim LTA for last year? Can i do it now? Satish, Banglore
A If you switch jobs, you can get the LTA not only from your present organisation but also from your former employer, if the concession is lying unutilized.
For example: in the 2006-09 block, you claimed LTA in 2007. In 2008, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
8. I performed journey by plane. Will I get LTA benefit? Puneet, Mumbai
A In case of journey performed by air, then you can get the LTA benefit for :Economy Air fair of National carrier by the shortest route or the amount spent which ever is less.
9. I performed journey by first Class Rail . Will I get LTA benefit? Amit, Mumbai
A In case of journey performed by rail, then you can get the LTA benefit for : A.C. first class rail fare by shortest route or amount spent which ever is less.
10. What if Place of origin and destination place of journey connected by rail but journey performed by other mode of transport.. Will I get LTA benefit? Amit, Mumbai
A Amount exempted for LTA will be – A.C. first class rail fare by shortest route or amount spent which ever is less.
11. Can a holiday package be claimed for LTA exemption? Rahul, Gurgaon
A Holiday package can be claimed for LTA exemption.
LTA exemption can be claimed only for travel – if your holiday package included hotel and sightseeing (which it normally does) – you won’t be able to take an exemption for that.
Also, LTA exemption can be availed for family – ie your spouse, dependent children, dependent brothers or sisters only, so if you have taken a holiday with your extended family or children who are no longer dependent on you, then you can’t claim LTA exemption on that part of the expense.
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12. Can both husband and wife claim LTA exemption ? Manish, Ahmedabad
A If you and your wife both get LTA – both of you can’t claim exemption for the same travel but you can avail LTA benefit for different travel.
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So effectively between the two of you, you can claim exemptions four times in four years.