Lta
This query is : Resolved
02 April 2016
sir plz tell me clear about LTA tax benefits, means how can get income tax benefit of LTA
03 April 2016
Leave Travel Allowance: Tax Exemption of LTA/LTC
Many employers give Leave Travel Allowance (LTA) to their employees which can be claimed if
an employee goes on a vacation. This Leave Travel Allowance (LTA) can be claimed when an
employee goes on a vacation and submits the actual bills to the employer. This amount is also
sometimes referred to as Leave Travel Concession (LTC).
Different employers give different amounts as Leave Travel Allowance (LTA) depending on the
position at which the employee is working. At the time of filing the income tax return, the amount
received as Leave Travel Allowance is exempted to a specified level for the purpose of computing
Income chargeable to tax under head Salaries.
The amount received as LTA/LTC is taxed as:-
LTA/LTC Received xxx
(Less) LTA/LTC Exempt (xxx)
Amount chargeable to tax xxx
The amount so computed after claiming this exemption would be chargeable to tax as per the
Income Tax Slabs of the taxpayer for that Assessment Year.
Recommended Read: Income Tax Slab Rate
TAX EXEMPTION OF LEAVE TRAVEL ALLOWANCE
Income Tax exemption for Leave Travel Allowance is available u/s 10(5) from an amount received
by an employee from his employer for himself or his family. This exemption is only allowed if the
amount received is in relation to:-
Many employers give Leave Travel Allowance (LTA) to their employees which can be claimed if
an employee goes on a vacation. This Leave Travel Allowance (LTA) can be claimed when an
employee goes on a vacation and submits the actual bills to the employer. This amount is also
sometimes referred to as Leave Travel Concession (LTC).
Different employers give different amounts as Leave Travel Allowance (LTA) depending on the
position at which the employee is working. At the time of filing the income tax return, the amount
received as Leave Travel Allowance is exempted to a specified level for the purpose of computing
Income chargeable to tax under head Salaries.
The amount received as LTA/LTC is taxed as:-
LTA/LTC Received xxx
(Less) LTA/LTC Exempt (xxx)
Amount chargeable to tax xxx
The amount so computed after claiming this exemption would be chargeable to tax as per the
Income Tax Slabs of the taxpayer for that Assessment Year.
Recommended Read: Income Tax Slab Rate
TAX EXEMPTION OF LEAVE TRAVEL ALLOWANCE
Income Tax exemption for Leave Travel Allowance is available u/s 10(5) from an amount received
by an employee from his employer for himself or his family. This exemption is only allowed if the
amount received is in relation to:-
03 April 2016
How many times can LTA exemption be claimed?
The taxpayer can claim exemption in respect of any 2 journeys in a block of 4 years. The Income
Tax Department has created block of 4 years each and in each block, the exemption can be
claimed twice.
The block of years during which exemption can be claimed twice are:-
Block No. LTA Block Years
1st Block 1986-89
2nd Block 1990-93
3rd Block 1994-97
4th Block 1998-01
5th Block 2002-05
6th Block 2006-09
7th Block 2010-13
8th Block 2014-17
In case a taxpayer has not been able to claim both the exemption or has claimed only 1 exemption
in a particular block, he can carry forward the exemption of 1 journey to the next year.
Please note that he can carry forward the exemption of 1 journey only to the next year and not to
the next block. For eg: If a taxpayer has only claimed a single exemption in the 7th Block i.e.
2010-13, he can carry forward this exemption to the next year i.e. 2014 and can claim this
exemption only in the year 2014. The original 2 exemptions for 2014-17 would also continue to be
there.
Other Relevant Points regarding LTA
In case the LTA is encashed without performing the journey, no LTA Exemption would be
allowed and the entire amount received by the employer would be taxable.
1.Family for this purpose means the spouse and 2 children of the employee. It also includes
parents, brothers & sisters of the employee who are wholly or mainly dependent upon him
2.The exemption can be availed for the journey undertaken while on leave during the tenure of
service or even after retirement/termination from service.
3.It is not necessary that the family members should perform the journey along with the employee
concerned.
4.employer for the purpose of boarding and lodging or for any other purpose will not qualify for
deduction.
The Leave Travel Allowance (LTA)/Leave Travel Concession (LTC) amount computed above is
allowed as an exemption for income tax purposes. Your employer may pay you a different amount
depending on your position in the organisation.
The taxpayer can claim exemption in respect of any 2 journeys in a block of 4 years. The Income
Tax Department has created block of 4 years each and in each block, the exemption can be
claimed twice.
The block of years during which exemption can be claimed twice are:-
Block No. LTA Block Years
1st Block 1986-89
2nd Block 1990-93
3rd Block 1994-97
4th Block 1998-01
5th Block 2002-05
6th Block 2006-09
7th Block 2010-13
8th Block 2014-17
In case a taxpayer has not been able to claim both the exemption or has claimed only 1 exemption
in a particular block, he can carry forward the exemption of 1 journey to the next year.
Please note that he can carry forward the exemption of 1 journey only to the next year and not to
the next block. For eg: If a taxpayer has only claimed a single exemption in the 7th Block i.e.
2010-13, he can carry forward this exemption to the next year i.e. 2014 and can claim this
exemption only in the year 2014. The original 2 exemptions for 2014-17 would also continue to be
there.
Other Relevant Points regarding LTA
In case the LTA is encashed without performing the journey, no LTA Exemption would be
allowed and the entire amount received by the employer would be taxable.
1.Family for this purpose means the spouse and 2 children of the employee. It also includes
parents, brothers & sisters of the employee who are wholly or mainly dependent upon him
2.The exemption can be availed for the journey undertaken while on leave during the tenure of
service or even after retirement/termination from service.
3.It is not necessary that the family members should perform the journey along with the employee
concerned.
4.employer for the purpose of boarding and lodging or for any other purpose will not qualify for
deduction.
The Leave Travel Allowance (LTA)/Leave Travel Concession (LTC) amount computed above is
allowed as an exemption for income tax purposes. Your employer may pay you a different amount
depending on your position in the organisation.
07 April 2016
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