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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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What is Leave Travel Allowance? A Complete Guide
Post author: fincart
Post published: October 20, 2023
Post category: Income Tax

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

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

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

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

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

5. 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 to claim 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.
The 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 for 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 a 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 travel 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.

Filing of Itr With or Without a Ca?

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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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Last Updated on 6 months by Shreya Sharma

Leave Travel Allowance (LTA): Benefits, How It Is Calculated and Exemption

Last Updated on May 24, 2022 by

Employers provide various allowances to their employees that form a part of their overall salary package. One such allowance is the leave travel allowance, also known as leave travel concession. What is best is that you can claim a deduction on this amount while filing your taxes. Let us understand the provisions of the Income Tax Act regarding LTA.

Table of Contents

What is a leave travel allowance?

Employers provide their employees with Leave Travel Allowance (LTA) as part of their CTC . This is given for the purpose of travelling while on leave. Section 10(5) of the Income Tax Act, 1961 provides the rules regarding LTA and how you can claim a deduction on it while filing your tax returns .

Let us see how and when it is allowed.

What are the conditions to claim a deduction on LTA?

You can claim a deduction for the leave travel allowance subject to the following rules:

There were expenses on an actual journey. The journey can be via any mode of transport, including air, rail, and road.
You cannot claim expenses on any other expenses during the journey. For example, expenditure on your hotel stay, lunch, or sightseeing cannot be deducted.
You can only claim the deduction on domestic travel. International travel is not included under this provision.
You can claim your travel expenses and those of your family if they are travelling with you. For this purpose, ‘family’ includes your spouse, children, dependent parents, and siblings.
The claim can be made only for two children if they are born after 1 October 1998. If a child is born prior, no such restriction is applicable.

How much can you claim as a deduction?

The Income Tax Act has prescribed limits on the amount that can be claimed as a deduction. It is as follows:

1. Air travel

The maximum amount you can claim is limited to the economy fare of the national carrier’s airline. You must take into account the cost of the shortest path to your destination.

2. Travel between places connected by rail

If the two locations are connected by rail, the deduction amount is determined as follows:

The price of a first-class AC ticket for the quickest route to the destination.
The amount actually spent.

Whichever is less. Except for air travel, this applies to all types of transportation. So, whether you’re travelling by rail or by car, you must adhere to this guideline.

3. Travel between places not connected by rail but other modes of public transport

In this case, the amount of deduction is taken as the lower of the following:

The fare of a first-class or deluxe class ticket of the recognised mode of travel. The price for the shortest route is taken.
The actual amount spent.

4. Travel between places not connected by any recognised mode of public transport

In such a case, assume that the distance is covered as if you travelled by train. The amount of deduction is restricted to the first-class AC rail fare. The distance covered via the shortest route is considered.

5. Travel to multiple destinations

Moreover, you may be travelling to multiple places on your journey. Here, the exemption will be calculated based on the travel fare of the shortest route between the place of origin and your farthest destination.

How to claim the deduction on LTA?

To claim the deduction, you must first have valid proof of the expense. This can be the rail or bus ticket, your flight’s boarding pass, or any such document. The rules regarding LTA are determined mainly by the employer. In fact, the Income Tax Act does not make it necessary for you to maintain valid proof. However, you must always keep it handy as you may require to furnish it to the employer or tax authorities.

Moreover, you cannot claim a deduction on LTA every financial year. You can only claim it for two journeys in a block year.

But, what is a block year? Let us explain it in detail.

A block year is a set of 4 calendar yrs. The government determines it for the purpose of calculating LTA claims. This was first established in 1986, making the first block period from 1986 to 1989. At present, the block period applicable is between 2022-2025.

If you do not claim LTA in a block year, it can be carried forward to the next. Let us understand the rules regarding the same.

Carry forward of LTA

The unclaimed LTA on one or two journeys is carried forward to the subsequent block year. However, you must claim the allowance within the first calendar year of the block.

For example, you only make one LTA claim in the 2018-2021 block period. This leaves one unclaimed journey that is carried forward to the 2022-2025 block. You may now claim a total of three LTAs in the current block. However, the carried forward claim must be made during 2022 itself.

Once you calculate your deduction amount, you can claim it while filing your tax return. Any excess amount on account of LTA forms a part of your salary. This is taxable as per your tax slab .

In conclusion

Leave Travel Allowance is a part of your CTC that the employer provides. It serves as compensation that you receive while travelling on leave. You can claim a deduction on LTA while filing your tax returns. Such a claim can be made twice in a block year. This allowance proves beneficial for employees seeking some relief on their travelling expenses.

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

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

Table of Contents

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

What is Leave Travel Allowance (LTA)?

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

People who can Claim Leave Travel Allowance (LTA)

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

Rules for Claiming LTA

The rules for claiming LTA are as follows:

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

Eligibility for Leave Travel Allowance (LTA)

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

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

LTA Exemption for Various Modes of Transportation

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

LTA for Multi-Destination Trips

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

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

Claiming LTA in case of a Job Change

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

Unclaimed LTA

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

LTA Exemption for Vacation on Holiday

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

Documents Required for Claiming LTA

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

Procedure to Claim LTA

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

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

FAQs about Leave Travel Allowance (LTA)

What does leave travel allowance cover.

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

How many times can an employee claim Leave Travel Allowance?

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

Is international travel covered under Leave Travel Allowance?

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

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

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

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

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

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

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

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

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

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

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

What is the latest block period to claim LTA exemption?

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

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Leave Travel Allowance (LTA) - Explained

Leave Travel Allowance (aka LTA) or Leave Travel Concession is given to employees to travel to any place in India either on leave or retirement from service or termination from service. Learn more.

Section 10(5) of Income Tax Act 1961 provides the exemption in respect of Leave Travel Concession (LTA).

This document covers

Who can claim LTA?
Conditions for claiming LTA
Limit of Exemption for LTA
Limits of exemption for various modes of Transport

1. Who can claim LTA?

Individuals (Citizens as well as non-citizens) can claim the Leave travel concession received as a part of the salary.
LTA can be claimed in respect of travel done by the taxpayer and his/her family . Family for the purpose of LTA consists of taxpayer, spouse and children of the taxpayer and parents, brothers and sisters of the taxpayer or any of them wholly or mainly dependent upon the taxpayer.

2. Conditions for claiming LTA

LTA should be given by the employer as a part of the employee salary . Employee cannot claim exemption if LTA is not part of his salary
LTA exemption can be claimed only for actual expenses.
LTA exemption can be claimed in respect of Domestic Travel only. It cannot be claimed in respect of international travel .
LTA exemption can be claimed for a maximum of 2 children born after 01st August 1998. The restriction of 2 children is not applicable to multiple births after 1 child. For children born before 01st August 1998, there is no restriction .
LTA can be claimed for only the travel cost. LTA cannot be claimed for hotel and accommodation, petrol, site seeing costs etc.
LTA exemption is minimum of Actual travel cost or LTA provided by employer.
LTA is taxable if the employee encashes the Leave Travel allowances.

3. Limit of Exemption for LTA

The LTA exemption is available in respect of 2 journeys performed in a block of 4 calendar years commencing from the calendar year 1986.
If the taxpayer does not avail LTA in a block of 4 calendar years, 1 such unavailed LTA will be carried forward to the immediately succeeding block of 4 calendar years and will be eligible for exemption. Example : Mr Ram does not avail the Leave Travel Allowance (LTA) for the 2018-2021 years. He can carry forward the maximum 1 LTA to the next block i.e., 2022-2025 years. If he avails the LTA in April 2022, it will be treated as having availed in respect of journeys in 2018-2021. He is also eligible to take exemption for 2 more journeys in the block of 2022-25
The current block for claiming LTA exemption is 2022-2025

4. Limits of exemption for various modes of Transport

If the journey is performed by Air : Amount not exceeding the air economy fare of the National carrier by the shortest route to the place of destination.
Where Rail Service is available: Amount not exceeding the air conditioned first class rail fare by the shortest route to the place of destination
A Recognized public transport system exists : Amount not exceeding the 1 st class or deluxe class fare on such transport by the shortest route to the place of destination.
No Recognized public transport system exists : Amount equivalent to the air conditioned first class rail fare , for the distance of the journey by the shortest route as if the journey has been performed by rail.

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Leave Travel Allowance (LTA)

What is lta.

LTA or Leave Travel Allowance, is a tax exemption for an allowance paid to the employee by the employer for travel expenses, while he or she is traveling on a leave.

Leave travel allowance can act as a tool for employees to save on taxes while taking leaves for traveling across India. Section 10(5) of the Income Tax Act, 1961, along with Rule 2B, provides tax exemptions and outlines the conditions for such exemptions. However, individuals opting for the New tax slab are not eligible for leave travel allowance.

An employee needs to plan their travel according to the purpose of claiming LTA exemption successfully. The income tax department of India has listed some rules and regulations regarding claiming exemptions under LTA.

Eligibility Criteria for Claiming LTA

The eligibility criteria for claiming LTA or leave travel allowance are as follows.

1. Legitimate evidence: Employees have to provide real pieces of evidence of their travel expenses to claim the LTA. It allows all modes of travel including land, train, and air. Only legitimate cost of travel is permitted for reimbursement. 2. Only travel costs: Other costs during traveling such as food, lodging, activities, etc are not covered under LTA. 3. Only domestic travel: Leave travel allowance only covers domestic travel across India. Employees cannot claim LTA for overseas (foreign trips) travel. 4. Twice in 4 years: The Government of India allows employees to claim LTA only twice in a block of 4 years. They cannot apply for LTA every fiscal year.

How to Claim Leave Travel Allowance (LTA)?

The process for claiming leave travel allowance differs according to the company. Employers commonly announce a due date for employees to claim for LTA. It is important to go through the LTA policy of the organization for a detailed claiming process.

In general, it contains these 3 basic steps:

Filling out the LTA form provided by the employer.
Submitting proof of travel details (documents).
Waiting for approval and reimbursement.

Documents Required for Claiming LTA

Employees might have to submit proof of travel records such as

Boarding passes
Receipts from travel agencies, etc.

Although in many cases, employers do not ask for the above-mentioned proof of records, it is advisable for employees to retain these documents.

LTA Rules for Exemption

1. employees can travel to any place in india..

Traveling to any destination across India is allowed under LTA. If the destination is not directly connected by recognized public transport, it will be assumed that the journey is made using the Indian railway using the shortest route. The exempted travel costs will be based on the fare of AC first-class rail tickets from the origin city to the destination city.

2. No international trips are considered.

In a case where the employee is taking an international or foreign trip, he/she/they is not eligible for an exemption.

3. There should be an actual journey to be eligible for claiming the exemption.

An employee cannot claim an exemption without traveling. The employer may ask for proof of travel records such as tickets, boarding passes, or receipts from the travel agent.

4. Food or stay or any other expenses are not considered.

Only the travel cost is exempted under LTA. Other expenses such as food, lodging, vacation activities, and sightseeing are not covered under LTA.

5. LTA can be claimed only for two journeys in a block of four years.

A block year is predetermined by the Government of India for employees to claim LTA. The first block year began in 1986 and is for a period of 4 years. The latest block year for claiming LTA is 2018-2021. Employees can claim exemption on travel expenses twice in one block of 4 years.

6. The family of the employee can also claim an exemption.

Employees can claim for exemption of travel expenses if any family member such as a spouse, children, dependent parents, brother, or sister takes a journey with or without them.

Unclaimed LTA – Carry Forward

In a case where an employee does not claim the leave travel allowance within the 4 years block, one of the 2 unused LTA is applicable to be carried forward to the next 4-year block. The employee can then use 3 LTAs in that block of 4 years.

To be eligible for the unutilized Leave Travel Allowance (LTA), the employee must undertake a trip during the first calendar year of the subsequent block. If the unclaimed LTA is not utilized within the initial year of the following block, it will expire and cannot be claimed at a later time.

What expenses can be included under LTA?

Leave Travel Allowance can be claimed only on the travel expenses incurred by an employee during a trip. It cannot be claimed for other expenses during the trip such as food, lodging, vacation activities, sightseeing, local conveyance, etc.

Calculation of Leave Travel Allowance

Calculating leave travel allowance includes evaluating the income from the salaries of employees. The LTA is exempted to a certain limit, beyond that, the rest of the amount is taxable under the general income tax slab.

For example, imagine an employee receiving an LTA of ₹10,000. If the travel expense incurred by him is ₹8,000, he is only allowed to claim an exemption for ₹8,000. The balance amount of ₹2,000 will be included in his taxable salary income.

5 Benefits of Leave Travel Allowance

1. Tax Saving: LTA allows employees in India to save on income tax by claiming exemption on travel fares or benefits for journeys taken within the country. 2. Family Coverage: LTA extends to the travel expenses of immediate family members, including spouses, siblings, parents, and children, provided they travel together with the employee. 3. Customization by Employers: Employers have the flexibility to determine the LTA amount. It is based on factors like pay scale, job responsibilities, and job title, allowing for customization in an employee’s salary structure. 4. Employee Motivation: Including LTA as part of the salary package can serve as an additional incentive for employees, boosting their overall job satisfaction and motivation. 5 . Domestic Tourism Promotion: LTA encourages employees to explore various destinations within India. This promotes domestic tourism and contributes to the growth of the country’s tourism industry.

Frequently Asked Questions (FAQs)

Q. who is eligible for lta.

Any salaried employee in India working under a registered company is eligible for LTA. The LTA can be claimed only on travel costs incurred by the employee. The travel expense claimed under LTA is only allowed on domestic travel. The LTA can only be requested if the employee has taken time off from work specifically for traveling.

Q. Can I claim LTA without traveling?

No, Leave Travel Allowance cannot be claimed without traveling. LTA is a benefit provided to employees to cover their travel expenses when they take leave for the purpose of travel. To claim LTA, you must have undertaken the travel and provide relevant proof such as tickets or travel receipts.

Q. What happens if LTA is not claimed?

Under the carry-over concession rules, if an employee has not claimed LTA in the previous block or has claimed it only once, they can still claim an additional LTA in the next block of calendar years. This allows the employee to avail of LTA tax breaks for up to three journeys in the current block of years.

Q. How many leaves are required to claim LTA?

The minimum number of leaves required to avail of the Leave Travel Allowance (LTA) exemption is not specified in the Income-tax Act. However, it is advisable to inquire with your employer as they may have their own requirement regarding the number of leaves needed to claim the exemption.

Q. Can I claim LTA in ITR?

Yes, you can claim LTA in your ITR. LTA is a tax benefit for travel expenses within India provided by employers. Keep necessary documentation and receipts for support. Ensure you meet the specific conditions and limitations set by your employer. Consult a tax professional or refer to the latest guidelines for accurate filing.

Q. Is Leave Travel Allowance only for Domestic Travel?

Yes, Leave Travel Allowance can be exempted only for domestic travel across India. It does not allow tax exemptions for foreign trips or overseas travel. It can be claimed for travel to any destination within India by means of road, rail, or air. The purpose of LTA is to encourage employees to take vacations and explore different parts of the country.

Q. How much is LTA in salary?

LTA deductions are applicable only for the shortest tour journey, including the place of departure and return. For instance, if a salaried employee receives ₹50,000, they can claim only ₹30,000. The remaining ₹20,000 will be treated as taxable income based on the applicable tax slab rates.

Q. What is the maximum limit in LTA?

The maximum limit for LTA (Leave Travel Allowance) is determined by the employer and may vary. However, there is a caveat that the exemption is limited to the lowest of the following three amounts:

The actual travel expenses incurred by the employee for the trip.
The amount specified by the employer in the LTA policy.
The amount is equivalent to the economy-class airfare of the national carrier (in case of air travel) or the first-class AC train fare (in case of rail travel) for the shortest route to the destination.

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How to claim lta from your employer.

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

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Leave Travel Allowance (LTA)

There are different tax benefits like deductions and exemptions under the Income Tax Act, 1961 , available to salaried class. Deductions include premium paid towards life insurance policies, housing loan interest, etc. which get reduced or deducted from total taxable income. On the other hand, exemptions do not get counted in the total taxable income. These exemptions also help the employer to structure the salary of the employee in a tax efficient manner. One of the exemptions which is commonly used by many employers is Leave Travel Allowance (LTA). The exemption is also available for LTA received from past employer with regards to travel after the retirement of service. This is a common benefit which can be seen in the case of employees working in the government sector. The Finance Minister Mr. Arun Jaitley, in Budget 2018 reintroduced standard deduction of Rs. 40,000. Standard deduction replaces the deductions available under the heads of Travel Allowance and Medical Allowance.

What is Leave Travel Allowance?

Leave Travel Allowance, as the name suggests, is a tax exemption for an allowance paid to the employee by the employer for travel expenses incurred while he or she is on leave. There are many conditions to Leave Travel Allowance and hence one needs to plan their travel accordingly for the purpose of claiming LTA exemption successfully. The Income Tax Department has listed down the rules and regulations with regards to claiming exemptions under LTA.

Conditions for claiming LTA

Let’s go through the conditions and obligations necessary for claiming the exemption.

The claimant needs to cover the actual journey in order to be eligible for claiming the exemption.

The travel should be within the boundaries of the country. Hence, international travel is not eligible to be claimed or covered under LTA.

To be eligible for exemption, the employee or the claimant must be travelling alone or with his/her family. The definition of family includes the spouse of the employee, children, dependent parents, siblings of the employee. The exemption is limited to only two children of the employee who are born after 1st October, 1998. This means children born before 1 October 1998 do not come under the restriction of two children.

LTA exemption

Leave Travel Allowance exemption is given only on the actual cost of travel which is the transport fare incurred on bus, airplane or railway. No other expenses of travel, like sightseeing, hotel stay, expenses on food etc., can be used for LTA exemption. The actual exemption depends on the LTA provided by the employer.

Illustration – If the LTA given by the employer is INR 35,000 and actual eligible cost of travel incurred by the employee is INR 25,000, then the exemption will be granted on only INR 25,000 and balance INR 10,000 would be included in taxable salary income.

Exemption with regards to various mode of transport

LTC Block Years

Block year is decided by the government for the LTA exemption, and it is different from the financial year. Block year comprises of a batch of 4 years each. The first block year started in the year 1986. The list of block years has since been 1986 to 1989, 1990 to 93, 1994 to 97, 1998 to 2001, 2002 to 05, 2006 to 09, 2010 to 13 and so on. The current running block year is from the period of year 2018 to 2021. The preceding block year was from year 2014 to 2017.

Carryover of unclaimed LTA

If an employee has not availed the exemption with regards to one or two journey(s) in the period of 4 years in block year then he/she is allowed to carry over such exemption to the next block. This is provided that he or she avails the benefit in the very first calendar year of the immediately following block. Below is an illustration for better understanding.

In the below case, the carry over exemption is claimed in the first calendar year of immediately following block

Case 2 - Where carry over exemption is not claimed by the employee in the first calendar year of immediately following block

Procedure to claim LTA

The procedure to claim LTA is normally depends on the employer. The employer announces the period and due date within which the employees can submit their proof of travel documents such as tickets (in original), invoices, boarding pass etc. along with necessary declaration. While it isn’t always compulsory to submit documents i.e. travel tickets, to the employer, but it is advised to always keep the copies available with one. This is because of the following reasons a) Tax Authorities can demand the same anytime for verification or if there is any enquiry b) It is advisable to submit them to the employer to ensure tax calculations are done correctly.

Benefits of Leave Travel Allowance (LTA)

LTA (Leave Travel Allowance) is an important salary component for an employee which helps him/her save income tax. The travel fare or benefit is eligible for journeys taken within the boundaries of the country. Any other bill apart from travel fare cannot be used for exemption. The employee is eligible to produce travel related bills for the journey taken in an airplane, train or bus or any other authorised mode of public transport and save on taxable income. The employer adds LTA to the salary structure based on different factors such as pay-scale, job responsibilities, the title of job etc. LTA also covers travel of close family members such as spouse, brother, sister, parents, and kids provided they have taken the same journey with you.

Calculation of Leave Travel Allowance

An employee is allowed to make an LTA claim for two journeys in a single block which comprises of 4 years. These blocks are different from financial years declared by the Income Tax Department.

Presently we are in the block year running from Jan 2018 to Dec 2021. The employee is eligible to claim for two journeys in this block year. However, if the employee does not make any claim in one year then it moves on to the next year but not next block. LTA exemption can only be taken for ticket or travel fare and no other expense can be included or will be eligible for LTA.

LTA Eligibility

Not all employees can be given the benefit of LTA by the employer. It is dependent on the job role, job title, salary grade, etc. The employer makes a decision on the amount to be allocated for LTA to an employee. To claim an LTA, an employee has to travel within the block year (within India). It could be a round trip with family members or solo trip.

LTA Example:

Let’s take a case of Mr. Prem who has been given LTA by the employer of INR 30,000. Mr. Prem takes a trip but the fare ticket expenses come to only INR 25,000. In this case, the eligibility for the exemption that can be claimed by Mr. Prem will be limited to INR 25,000 only and not INR 30,000 granted the employer. This is because the expenses for actual travel will be taken into consideration and cost of food or accommodation cannot be claimed under LTA.

FAQs About Medical Allowance and Reimbursements

How many times can an employee claim leave travel allowance in a block year?

An employee can claim Leave Travel Allowance only twice in a single block of 4 years.

Is international travel or vacation by employee covered under leave travel allowance?

No, LTA is provided only for travel taken within the boundaries of India.

Can leave travel allowance be carried forward?

LTA can be carried forward to the next block but it needs to be utilised within the first year of the next block.

Leave Travel Allowance (LTA)

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

What is LTA?

Leave Travel Allowance Benefits

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Understanding the LTA & its benefits

Leave Travel Allowance (LTA)

First, we need to understand the concept of Leave Travel Allowance Related Rules and Exemption Guide then we can claim for this allowance.

What is LTA?

LTA stands for leave travel allowance. This allowance is provided by the employer to cover the travel expenses of the employee when he is gone for a holiday trip. Leave Travel Concession is another name of LTA. This allowance is exempt from the tax under section 10(5), Income Tax Act, 1961.

LTA Exemption Rule-

The following image stated the exemption rule of LTA as per the Income Tax Act.

LTA can be categorized into 2 parts:

Any travel concession received by employees from their employers for themselves and their families to cover expenses incurred in travelling when they are on leave.

Any travel concession received by employees from their former employers for themselves or their families to cover expenses incurred in travelling after the termination of service or post-retirement.

Note: As per the income tax act, the term ‘family’ includes:

Spouse of the individual
Parents of the individual (mainly dependent on the individual)
Children of the individual
Brothers & sisters of the individual (mainly dependent on the individual)

To check the eligibility and calculate LTC accurately, individuals need to following LTA rules:

Individuals incurred some kinds of expenditure during their trip but not all expenses are covered under LTA.
Expenses made on shopping and food are not tax exempted.
Only some expenses related to employee’s holiday trip are covered under LTA.
The employees have to keep proof of travelling as it will be required to auditing purposes.
Tax exemption is allowed for two-holiday trips during the block of 4 years.
The amount of exemption will be calculated on the basis of chosen transportation & connectivity of place of the trip.

What are the block years in LTA?

LTA block years are the blocks of four years created by the Income Tax department. As per the rule, the exemption can be claimed twice in each block period.

The list of LTA block years:

Current Leave Travel Allowance Block year

The current LTA block year is 9th block year which includes 2018, 2019, 2020 and 2021.

List of exempted expenses under Leave Travel Allowance

By-Air travel expense- Air travel fare of economy class of national airline by the shortest air route or actual travel expense paid, whichever is less, exempt from tax.
Travel exp. by train- The first-class rail fare by the shortest route or actual travel expense paid, whichever is less, exempt from tax.
If the destination and origin spot of the trip is connected by train but the journey is covered by another mode of transport- The first-class rail fare by the shortest route or actual travel expense paid, whichever is less, exempt from tax.
If the destination and origin spots are not connected by air or rail (fully/partly) and connected by any other public transport system- The deluxe or first-class fare of the available public transport for shortest route or actual travel expense paid, whichever is less, exempt from tax.
If the destination and origin spots are not connected by air or rail (fully/partly) and not connected by any other public transport system- The first-class rail fare by the shortest route or actual travel expense, whichever is less, exempt from tax.

Carry Over Concession

If the employee didn’t use LTA benefit either once or twice in a block period of 4 years, the employee can still claim for LTA tax exemption using LTA in the immediately succeeding year of the 4 years block period. It is known as carry over concession.

For example:

Suppose Mr. Ankit has claimed only 1 LTA tax exemption during 7th block period i.e. 2010-2013. He can still claim the remaining exemption. So, when he can claim it?

He can claim remaining LTA exemption in the coming next year, i.e. 2014. However, 2014 will be a part of 8 th Block Period, he can still claim for the 3 LTA concession in this block period but Mr. Ankit needs to claim this carry over concession in 2014 only, it will not be accepted later than that.

Limitations of Leave Travel Allowance

LTA covers only domestic trip. An international travel will not be covered under this.
LTA is provided to cover travel expenses only.
To claim LTA benefit, the mode of transport should be either railway, air or other public transport.
An individual cannot claim LTA exemption for more than two children. This restriction will not be applicable if the children are born before 1 st Oct 1998.
In case of multiple birth, the birth of children after first child will be considered as one child only.

LTA calculation

Suppose Mr. Ankit, an employee of ABC Company, travelled from Delhi to Mumbai and return through a business-class flight. Total expense on his air tickets was estimated Rs. 40,000. However, the economy class fare of the return journey was Rs. 12,000. For this travel expense, he gets reimbursed amount for Rs 40,000 from his employer. How much can he claim for LTA tax exemption?

Solution: In that case, the fare of economy-class is lower as compare to actual spent money on tickets. Hence, he can claim only Rs 12,000 for LTA exemption and remaining amount will be added to the taxable income.

Vehicle allowance & its tax Benefits

It has been stated that reward is a return gift for the dedication and hard work. Moreover, when an employer rewards his employees by providing them motor car facility. For tax purpose, Income tax department is required to calculate perquisite value of the vehicle.

Valuation of motor car usage perquisite

Vehicle allowance is provided by the employer in order to cover the day to day travelling expenses of the employees. However, this perquisite is a taxable one to an extent in employees’ hands. This comprehensive guide by Tax Block helps to get better understanding about the same.

Motor Car Allowance

Generally, if any employer provides a vehicle & its related facilities to their employees, it is termed as motor car perquisite. This benefit is taxable from the tax point of view but it has certain conditions to make it tax free at certain limit. Therefore, it is required to understand the concept of its valuations to get the tax benefit related to this perquisite.

Valuation of vehicle perquisite

As per rule 3(2), Income Tax Act, the valuation of vehicle concession depends on certain conditions which are as follows:

Situation 1: If the motor car is hired or owned by the employer and he bore the running & maintenance expense:

Motor Car is exclusively & wholly used for official purposes:

In that case, the motor car is wholly used for official purpose only irrespective of who owns that car i.e. the employee or employer, then it will not taxable perquisite in the hands of the employee. For the same, the required documents must be maintained by the employer.

Motor Car is exclusively used for private, or personal purposes of the employee:

When the employees use the motor car fully for their private or personal purposes, then it will be fully taxable for the employees.

The value of vehicle perquisite will be:

Actual expenditure incurred by the employer on maintenance & running of the car
Add: wear & tear cost of the vehicle (10% of the actual cost)
Add: the salary of chauffeur
Less: if the employee charges any amount for the usage of the car from the employee.

Therefore, the taxability of vehicle allowance can be calculated as below:

Find out the actual expenditure of the employer on maintenance & running of the car including the salary of chauffeur and depreciation.
Less: If the employee reimbursed any amount
Value of motor car perquisites to be taxed.

Vehicle is used partly for official & private purposes:

Situation 2: If the vehicle is owned by an employee but its maintenance & running expenses are borne by the employer:

Motor car is used exclusively for only official purposes:

When a car is being used only for office purpose, then an employee will not be liable for the tax-related to vehicle perquisite. In that case, specified documents need to be maintained by the employer.

Motor car is used partly for private and official purposes:

In that case, the value of perquisite will be calculated in the following manner:

Actual expenditure incurred by the employer
Less: Rs 1800 per month (below 1.6 cc) & Rs 2400 (above 1.6 cc) plus Rs 900 for driver’s charge, or a higher sum related to office use with certain conditions.
Value of the benefits

Situation 3: When the employee is provided other automotive conveyance and the actual maintenance & running expenses are borne by the employer

Employees’ conveyance is used for official purposes only:

No value of perquisite will be taxable in the hands of the employee

Employees’ conveyance used partly for private or official purposes:

The taxable value of perquisite will be actual expenditure incurred by employer excluded monthly Rs 900, or higher sum for office purposes under certain conditions.

Applicable conditions to claim a higher sum in respect of the usage of the vehicle for official purposes

The employer needs to maintain complete records of the journey by the employee for official purpose. The required details are date of journey, mileage, destination, and other relevant expenditure, and
The employee needs to provide a certificate by his employer that the expenditure has incurred wholly for official purposes.

What if multiple cars are provided to employee?

As per the choice of employee, the valuation of the car will be @ Rs. 1800 or Rs. 2400 monthly and the other cars will be considered as for private use

Vehicle at a concessional rate –

First, calculate the value of perquisite if the vehicle has been provided at free of cost.

Less: if any amount is being charged for the use of the car from the employee

Value of the benefit to be taxed

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I have made a travel in the month of June’22. Can I claim now. (Since current block is 2018-21, is this allowed to claim now?)

current block is jan 2018 – dec 2021 . I was not a part of the current employer . Can I still claim LTA ?

For more information you can visit http://www.taxblock.in

If I travel on weekend and go on full vacation next week and travel back next weekend. Can I claim LTA in this case?

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How To Calculate Leave Travel Allowance For Tax Exemption

Home » B2B » How To Calculate Leave Travel Allowance For Tax Exemption

An employee receives several types of allowances over and above their regular salary. Medical allowance, House Rent Allowance, and Leave Travel Allowance (LTA) are a few examples of such allowances. The allowances are part of the employee’s CTC. The employee can claim tax exemption for the income through these allowances. Leave Travel Allowance is a helpful tax-saving option for employees.

Corporate travel comprises essential and non-essential travel. Traveling to a holiday destination is a non-essential business trip. Many companies provide Leave Travel Allowance to help employees visit tourist destinations or hometowns. An employee may travel alone or with family to enjoy the benefits of LTA. Corporate travel managers can integrate the company’s LTA rules into the travel policy for effective implementation. Keep reading to know how to calculate travel allowance for tax exemption.

Understanding Leave Travel Allowance

The Leave Travel Allowance or Leave Travel Concession is the facility by the employer to enable employees on leave to travel from their place of work to any destination within the country. The name Leave Travel Allowance implies the employee should be on leave during the period of traveling to claim the allowance.

Employers use the quantum of LTA while structuring the annual package or the CTC. It enables the employee to avail of the tax benefits under relevant sections of the Income Tax Act. The corporate travel manager needs awareness of the mandatory requirements to help employees claim tax exemption.

The deductions for tax exemptions cover travel expenses for the round trip. These do not apply to other expenses like boarding, sightseeing, or shopping. One should ensure the traveling expenses do not exceed the Leave Travel Allowance. If the expenditure for traveling is less than the LTA amount, then the remaining amount becomes part of the employee’s taxable income.

Conditions for claiming LTA

Leave Travel Allowance has two obvious requirements: leave and travel. The employee must be on leave during the travel as the aim is to facilitate a break from the official work. Benefits of the Leave Travel Allowance may not be available to all employees in the organization.

The employer has the prerogative to provide the facility to employees by considering employee grades and pay scales. Confirming the pay structure is advisable to know whether the employee is eligible for the Leave Travel Concession. Travel managers should inform the date to claim LTA TO all eligible employees to help them plan travel and submit relevant documents to the finance department.

One can claim the economy fare of an LCC (Low-cost carrier) if traveling by air. LTA also applies to rail journeys. First class AC fare for the shortest route of train travel is permissible to avail tax exemption through LTA.

One may also claim tax exemption for travel by other modes like road transport. The expenses should be equivalent to or lesser than the first class AC fare of the train. Though travel expenses by all modes of travel are acceptable for tax benefits, the employee must produce valid journey tickets or receipts. A spouse, children, siblings, and dependent parents can accompany the employee for LTA travel. The tax exemption is only available for two children.

Factors to consider for LTA calculation

One must find out when to claim Leave Travel Assistance before knowing how to calculate Leave Travel Allowance in salary. Tax breaks for LTA travel expenses are available twice in the four years’ block to eligible employees. The system of block years began in 1986. The current block is 2022 -2025. The employee may claim the tax exemption in the next block if they cannot undertake travel with leave during the current block as the tax break carries forward to the next block. The employee who did not avail of tax exemption during the block of 2018-2021 is eligible to claim the same by availing of LTA in the current block. They are also eligible for claiming tax breaks for the current block of 2022-2025.

Let us understand how to calculate travel allowance to avail tax benefits. An employee can only claim tax-benefits for actual travel expenses by the shortest route. The employee qualifies to claim the entire LTA amount for tax benefit if the actual travel expenses are the same as the LTA amount.

One can claim the amount of Rs 5000/- by submitting documents to prove travel expenses if the LTA amount as per CTC is Rs 5000/-. Travel expenses of Rs 4000/- will add Rs 1000/- to the total taxable income as the employee can only claim tax benefits for Rs 4000/-. Employees opting for the new tax regime are not eligible to claim a tax break.

Suggested Read: Are Travel Expenses Tax Deductible Or Not?

Automated travel management solution

Corporate travel managers should use an automated platform for travel management to help employees get the best deals on travel and hotel bookings if they are going on vacation. It will help them get to travel and hotel bookings without hassles. The automated travel booking systems backed by advanced hybrid engine technology enable complex activities like travel booking and reporting.

Paxes blends super-efficient travel management with HRMS integration options to improve the corporate travel program. Travel managers can configure travel policies by incorporating LTA details of employees to help them avail of tax benefits.

Leave Travel Allowance is a crucial part of income that helps reduce employee tax liability. One should ensure to know the company policy about how to calculate travel allowance before making full use of the benefits and claim travel allowances for tax exemption.

How To Calculate Travel Allowance FAQs

What is the percentage of travel allowance.

Travel allowance depends on company to company and different types of services used during travel. Generally it is 10%.

How much travel allowance is allowed in income tax?

Maximum conveyance allowance is equal to 19200. While LTA depends on the actual spent on the travel.

What is travel allowance in salary?

Fixed percentage of salary that is dedicated to work related travel of the employee.

What is the limit of Traveling allowance exemption?

The traveling allowance exemption limit is the actual amount spent on the journey.

How do I claim travel allowance on my taxes?

Keep accurate records, determine the nature of your travel allowance, calculate the allowable deduction/exemption, claim deduction/exemption in tax return, and keep supporting documents ready.

Can I carry forward the unclaimed LTA of a block year to the next block year?

No, you cannot carry it forward.

What expenses can be included under LTA?

Transportation expenses, accommodation expenses, sightseeing expenses, and food and beverage expenses.

What factors should be considered when calculating travel allowance?

When calculating travel allowances, consider factors like destination, duration, accommodation costs, meals, transportation, and incidental expenses. Also, account for your organization policies, tax regulations, and the purpose of the trip. Accurate record-keeping and expense receipts are crucial.

Is there a standard formula for calculating travel allowance?

There is not a universal standard formula for travel allowance, as it varies widely among organizations and regions. Some may use per diem rates, while others calculate expenses individually. Compliance with local tax laws and company policies typically guides the calculation method used.

Pratyush is a traveling enthusiast who always looks for innovations in business travel management. He has 5 years of experience writing content on corporate travel management and working closely with expert business travel facilitators.

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HCM Data Loading Business Objects

Example of Loading Leave Travel Allowance Balances for India

In this example, you create balance initialization records to initialize leave travel allowance balances for India.

Load the Initialize Balance Batch Header

Use the InitializeBalanceBatchHeader.dat file to create the batch header.

Load the Initialize Balance Batch Lines

In the following example, several balances are being initialized for the same employee. The employee is identified by their payroll relationship number, employment terms number and assignment number.

The employee’s payroll and tax reporting unit must also be specified on every initialize balance line.

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COMMENTS

Leave Travel Allowance (LTA)
Leave Travel Allowance - Find out LTA rules, eligibility, claiming process, exemption limit, section and stay updated with the latest developments. Check out the example given for better understanding of LTA block. ... 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 ...
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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.
LTA: Meaning & Conditions to claim Exemptions- Learn by Quicko
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For instance, if the employer allows an LTA of INR 25,000 and the employee incurs travel costs of INR 35,000 on booking travel tickets, LTA exemption can be claimed only for INR 25,000. On the other hand, if the employee incurs a cost of INR 20,000, the exemption allowed would be INR 20,000 since it is lower than the actual LTC the employer allows.
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leave travel allowance: How to claim LTA from your employer
Leave Travel Allowance forms a part of an employee's total CTC (cost-to-company).Also known as Leave Travel Concession, an employee can claim an exemption under section 10(5) of the Income Tax Act, 1961, for expenses incurred for travelling when on leave anywhere in the country. Here, the amount you can claim as LTA, i.e., the money spent during the travel when on leave, is equal to the ...
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Leave Travel Allowance
Final Word. Leave Travel Allowance is a benefit offered by employers to compensate for travel of the employee and close family when on leave. You can claim an LTA exemption, offered under section 10 (3) of the Income Tax Act, while filing your tax return using the old tax regime. The new tax regime, however, does not have a provision for LTA.
Leave Travel Allowance
Leave Travel Allowance is given by an employer to an employee for a holiday or a vacation. Learn how to claim LTA, benefits and exemptions. ... 1998-2001, 2002-05, 2006-09, 2010-13, and so on are examples of block years. The calendar year 2018-21 is the block that applies for the present year. The calendar year 2014-17 was the previous block.
Leave Travel Allowance (LTA)
Leave Travel Allowance (LTA): Leave Travel Allowance is an allowance that an employee receives every month offered by employer when the employee travelling alone or with their family. Learn more about LTA Claim procedure, Calculation, Exemption, Benefits etc. ... LTA Example: Let's take a case of Mr. Prem who has been given LTA by the ...
Leave Travel Allowance (LTA)
Leave Travel Concession or allowance is an essential part of the salary structure and also acts as a great tax saving tool under the provisions of the Income Tax Act,1961. The first benefit of Leave Travel Allowance is that it is an addition to the basic salary. The entitlement is based on various factors like designation, pay scale, position, etc.
Understanding the LTA & its benefits
LTA stands for leave travel allowance. This allowance is provided by the employer to cover the travel expenses of the employee when he is gone for a holiday trip. Leave Travel Concession is another name of LTA. This allowance is exempt from the tax under section 10 (5), Income Tax Act, 1961. LTA Exemption Rule-.
Leave Travel Allowance: Claim Rule, Eligibility, Tax Exemptions
To claim your Leave Travel Allowance, you'll need to provide proof of travel, such as: Flight/Train tickets; Boarding passes; Duty passes; ... For example, if you received an LTA of ₹6,500 and you spent ₹5,500 on eligible travel expenses, you can claim an exemption of ₹5,500. The remaining ₹1,000 would be added to your taxable salary.
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): Procedure & Eligibility Criteria
Benefits Of Leave Travel Allowance; LTA Example; Conclusion; Introduction. Leave Travel Allowance (LTA full form) is a provision under the Income Tax Act, 1961 that allows salaried employees to claim tax exemption on expenses incurred for domestic travel. This exemption is commonly used by employers to structure the Cost to the Company (CTC) of ...
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. ... So for example, as an employee, you made just tax exemption claim under LTA only once in the last block of the year i.e. between 2014-2017. Then you are eligible to make ...
How To Calculate Leave Travel Allowance For Tax Exemption
Medical allowance, House Rent Allowance, and Leave Travel Allowance (LTA) are a few examples of such allowances. The allowances are part of the employee's CTC. The employee can claim tax exemption for the income through these allowances. Leave Travel Allowance is a helpful tax-saving option for employees.
Leave Travel Allowance (LTA)
Leave Travel Allowance Calculation. In a block of four years, an employee can avail the benefits of LTA for two journeys only. The block year is different than a financial year and is created by the Department of Income Tax to fulfill the purpose of LTA exemption. The Leave Travel Allowance calculation has started from the year 1986 and ...
Leave Travel Allowance
Leave Travel Allowance or LTA is provided to cover travel expenses during leave. LTA is eligible for income Tax exemption under Section 10(5) ... Conditions for claiming Leave Travel Allowance Exemption is available only on actual travel costs(Air, rail, or bus) Only domestic travel is considered Exemption is available for travel cost of ...
Example of Loading Leave Travel Allowance Balances for India
In the following example, several balances are being initialized for the same employee. The employee is identified by their payroll relationship number, employment terms number and assignment number. The employee's payroll and tax reporting unit must also be specified on every initialize balance line. In this example, you create balance ...

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

About the Author

Ektha Surana

Quick Summary

What is Leave Travel Allowance (LTA)?

Example of LTA

Benefits of Leave Travel Allowance

Conditions to claim Leave Travel Allowance exemption

What is the eligibility for LTA exemption?

Documents required for claiming LTA

LTA Exemption Rules for Various Modes of Transport

How Much Leave Travel Allowance Exemption Will You Get?

What Happens to LTA If There is No Traveling Involved?

What expenses can be included under LTA?

Unclaimed LTA

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

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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

Got Questions? Ask Away!

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Participants

Leave Travel Allowance (LTA): Benefits, How It Is Calculated and Exemption

What is a leave travel allowance?

What are the conditions to claim a deduction on LTA?

How much can you claim as a deduction?

1. Air travel

2. Travel between places connected by rail

3. Travel between places not connected by rail but other modes of public transport

4. Travel between places not connected by any recognised mode of public transport

5. Travel to multiple destinations

How to claim the deduction on LTA?

Carry forward of LTA

In conclusion

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

What is Leave Travel Allowance (LTA)?

People who can Claim Leave Travel Allowance (LTA)

Rules for Claiming LTA

Eligibility for Leave Travel Allowance (LTA)

LTA Exemption for Various Modes of Transportation

LTA for Multi-Destination Trips

Claiming LTA in case of a Job Change

Unclaimed LTA

LTA Exemption for Vacation on Holiday

Documents Required for Claiming LTA

Procedure to Claim LTA

FAQs about Leave Travel Allowance (LTA)

How many times can an employee claim Leave Travel Allowance?

Is international travel covered under Leave Travel Allowance?

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

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

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

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

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

What is the latest block period to claim LTA exemption?

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Leave Travel Allowance (LTA) - Explained

1. Who can claim LTA?