Points To Remember
| LTA Full Form | Leave Travel Allowance |
| Eligibility | LTA is eligibile to employees and their families, including spouse, children, and dependent siblings and parents. |
| Proof of travel | Tickets for booking, boarding passes, and bills must be gathered for claiming LTA. |
| Journeys are allowed | Only 2 journeys are allowed with a block of 4 years. |
| Current Block | 2022 - 2025 |
| Applicability | Applicable only for domestic travel within India. |
| Claiming in Job changes | Unused LTA balances can be carried forward to the new employer if the job change happens within four years. |
Table of Contents
As per Sec 10(5) of Income tax Act 1961, Income not included in the total Income:
In the case of an individual, the value of any travel concession or assistance received by, or due to, him, -
(a) From his employer for himself and his family, in connection with his proceeding on leave to any place in India;
(b) From his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service, subject to conditions as per Rule 2B of Income tax Rules
Meaning of Leave Travel Allowance (LTA)
LTA stands for Leave Travel Allowance. It is a type of allowance provided by employers to employees as a part of their salary package. LTA is specifically meant for covering travel expenses when an employee and their family travel during a period of leave.
Who is eligible for LTA?
Eligibility for LTA is generally restricted to individuals, specifically employees. An individual can claim LTA to cover travel costs for themselves and their family, including their spouse, children, and wholly or mainly dependent siblings and parents.
Conditions specified for claiming Leave travel Concessions
- LTA works with concept of block of 4 years (calendar years)
- Now the current block is 2022-2025
- Employee need to travel during his leave period only within India with to and from journey
- Only 2 journeys can be taken for each block
- If the employee has not utilized the LTA benefit in the block of 4 years, then only one journey can be carry forward which mandatory to be claimed by employee in the first year of next block only.
- Proof to be collected like ticket, boarding pass, agent invoice etc.
LTA Exemption Available
- The LTA exemption is applicable only to actual travel costs, such as air, rail, or bus fare. Expenses like hotel accommodation, and food are not eligible for the exemption.
- The exemption is limited to the LTA provided by the employer. For example : If the employer grants Rs.35,000 as LTA but the actual cost is Rs.25,000, the exemption applies only to the actual cost, and the remaining Rs.10,000 is considered taxable income.
- To claim the exemption, an actual journey is a must.
- LTA exemption is applicable only for domestic travel within India. International travel expenses are not covered.
- The exemption is available for the employee alone or with their family. 'Family' includes the employee's spouse, children, and wholly or mainly dependent parents, brothers, and sisters.
- The exemption is not available for more than two children born after October 1, 1998. No restrictions apply to children born before October 1, 1998.
As per Circular No. 8/2013 issued by Central Board of Direct Taxes issued dated 10th October, 2013, this exemption is limited to the actual expenses incurred on the journey which in turn is strictly limited to expenses on air fare, rail fare and bus fare only. No other expenses like local conveyance, sight-seeing expense etc., shall qualify for exemption.
Note:
As the circular and rules specified there, to allow the travel cost limited to Air fare, Rail fare only. The law is restricted to take other charges like local conveyance, sight-seeing expense etc. shall disqualify for exemption.
Amount eligible for LTA Exemption
|
Part of Fare |
Charges not a part of fare |
|
Air Fare |
Tax and other charges (Passenger service Fee, User development Fee, Airline Fee) |
|
Rail Fare |
Taxes and fee |
|
Bus Fare |
Taxes fees and surcharges |
|
Fuel Charges * |
Service Charges |
|
Government Taxes |
Convenience Fee |
|
Booking Fee (BKF) |
How to claim LTA in case of a job change?
In case of a job change, an employee can claim LTA exemption if :
- There is any LTA balance remaining from previous employment.
- Any unutilized LTA balance can be carried forward to the new employer if the change occurs within four years.
- If an employee has already availed LTA from your old employer then, he won’t be allowed to claim a new Leave Travel Concession from your new employer for the same period.
Can LTA be claim if the employee travels to multiple cities?
LTA reimbursement will be based on the expense of the most expensive leg of their travel which mean if an employee goes for vacation and visited multiple cities then; the exempted amount will cover the cost of round-trip travel from the employee's home city to the farthest destination visited and back.
Process to claim LTA
- First you need to decide your travel destination and mode of transport so that you can collect all the travel-related documents by booking them.
- Once booking done you can obtain the LTA application form from your HR department .
- Complete the form with accurate details including dates of travel, destinations, and costs and attach proof of your travel expenses such as tickets, boarding passes, hotel invoices, and any other relevant receipts.
- After filling up the application form hand over same to the person responsible for processing LTA claims.
- The individual responsible for processing LTA claims will review your LTA claim and verify the submitted documents then will approve.
- After approval, your LTA reimbursement will be processed as part of your regular salary or as a separate payment.
FAQs
Is there a requirement for an actual journey to claim LTA exemption?
-> Yes, undertaking the actual journey is a prerequisite for claiming LTA exemption. Simply receiving the allowance without travel does not qualify.
Is international travel covered under LTA?
-> No, LTA exemption is only applicable for domestic travel within India. International travel expenses are not covered.
Are there restrictions on the number of children eligible for LTA exemption?
-> Yes, there are restrictions on the number of children eligible for LTA exemption, especially for children born after a certain date.
What is the currect block period to claim LTA exemption?
-> The current block period is from 1 January 2022 until 31 December 2025.
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