What is Leave Travel Allowance? Exemptions and Conditions of LTA
What Is Leave Travel Allowance? Exemptions And Conditions Of Lta
Leave travel allowance is an allowance paid by employer to employee for the purpose of traveling within India. The major benefit of Leave Travel Allowances ( LTA ) is that they are exempt from tax. In this article we are going to discuss in detail what is LTA actually, benefits it provides, exemptions provided and conditions that need to be fulfilled for getting Leave Travel Allowances.
Leave Travel Allowance is a common term used among the salaried employee population of India. It is widely used by the employees for claiming eligible exemption as per the provisions under the Income Tax Act, 1961. In this article, Leave Travel Allowance has been explained at a glance.
What is Leave Travel Allowance?
- Leave travel allowance (‘LTA’) is an allowance paid by the employer to an employee for the purpose of travelling within India, either alone or with family.
- Leave Travel Allowance is paid only for the fare of travel, i.e. only traveling cost of tickets etc. Hotel, food and other expenses do not form part of Leave Travel Allowance.
- The amount paid as Leave Travel Allowance is exempt from tax.
- Leave Travel Allowance exemption can be claimed only for two journeys out of a block of four calendar years. Current block of four years is 2018-2021.
- It is limited to the actual amount of expenses.
- If Leave Travel Allowance is not claimed in current block of four years, then one travel can be carried over to the next block and should be used in the first year of next block itself.
Amount exempt under Leave Travel Allowance-
|
In case of travel by |
Amount of exemption |
|
Air |
Lesser of economic air fare by the shortest route or actual amount spent. |
|
Rail or any other mode to a place connected by rail |
Lesser of First class AC fare by the shortest route or the actual amount spent. |
|
Other places not connected by rail |
If a recognised public transport exists: amount not exceeding rate of first class or deluxe as the case may be. |
|
If a recognised public transport does not exists an amount equal to first class AC fare of railways for the distance of the journey by the shortest route. |
Other conditions-
- The Leave Travel Allowance exemption is only for travel expenses upon providing the relavant supporting documents like tickets and boarding passes
- The travel should be within India.
- The employee should be officially on leave from work for the period of travel.
- Leave Travel Allowance cannot be claimed twice in a year, i.e., though two journeys can be claimed in a block of four years, only one journey can be claimed once a year.
- Leave Travel Allowance exemption can be claimed for travel with the family.
- Family for this purpose includes:
- spouse, children (two children maximum);
- parents, siblings if wholly dependent on the individual claiming leave travel allowance.
.