Leave travel allowance

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2016 Dear,,,,

Please advise me, How the LTA facility provided by employer to its employee, is there any specific condition for giving such facility to its employee,

It is granted on monthly as a part of employees earning or it will granted on yearly basis, what will be maximum amount provided to claim LTA

kindly advise me on upon above quarry

Kaustuv

Kaustuv (Expert)
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05 January 2016 Hello,

LTA can be a component of monthly salary being paid to the employees, however, the exemption thereof under Income Tax Act would be available to employee on production of actual proof of travel as per the conditions mentioned as per the Income Tax Act. LTA exemption will be limited to the actual cost or Total LTA paid, whichever is lower.

Regards,
CA. Kaustuv

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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05 January 2016 Leave Travel Allowance (LTA) is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it. An LTA is the remuneration paid by an employer for Employee’s travel in the country, when he is on leave with the family or alone. LTA amount is tax free.
Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt.
Through this write-up, I want to shed light on the taxability and some other interesting relevant aspects which you as a salaried employee must keep in mind.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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05 January 2016 LTA exemption can be claimed where the employer provides LTA to employee for leave to any place in India taken by the employee and their family. Such exemption is limited to the extent of actual travel costs incurred by the employee. The total cost of the holidays is not covered, only the travelling cost is covered.

Travel has to be undertaken within India and overseas destinations are not covered for exemption.

For example, where an employer provides LTA of Rs. 25,000, but an employee spends only Rs. 20,000 on the travel cost, then the exemption is limited to only Rs. 20,000.

Travel cost means the cost of travel and does not include any other expenses such as food, hotel stay etc.

Meaning of Family for LTA :– The meaning of ‘family’ for the purposes of exemption includes spouse and children and parents, brothers and sisters who are wholly or mainly dependent on you. An individual would not be able to claim the exemption in relation to his parents, brother or sisters unless they are wholly or mainly dependent on the individual.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2016 Thanks for your reply,

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2016 Dear sir,
please advise from employer side how employer provide this benefit to their employee, and what will be the amount of Total Leave Travel allowance In year,