LTA & LTC EXEMPTION
This query is : Resolved
25 April 2023
Respected Expert
Kindly let me know how much exemption in LTA & LTC for the F.Y. 23-24 - A.Y. 24-25 ?
Kindly let me know how much exemption in LTA & LTC for the F.Y. 23-24 - A.Y. 24-25 ?
20 August 2023
LTA Exemption for FY 2023-24
LTA can be availed under the below-mentioned circumstances:
Only the employee's actual travel expenses are exempt from the rule. The full trip's expenses, including possible charges for dining, shopping, and other expenses, are not eligible for the tax exemption.
The exemption does not apply to more than two of the person's children who were born after 1 October 1998. There can only be two trips within a period of four years that qualify for the exemption.
The present period spans the years 2014 to 2017. The exemption may be carried over to the following block if the person does not use it during current one.
Given below is a list of expenses that is exempted under Leave Travel Allowance
Travel by air- Economic air fare by the shortest route or amount spent will be exempted depending on whichever is lesser.
Travel by rail- A.C. first class fare by the shortest route or the amount spent on travel will be exempted depending on whichever is lesser.
Place of origin and destination place of journey connected by rail but journey performed by other mode of transport
Place of origin & destination not connected by rail(partly/fully) but connected by other recognised public transport system
Place of origin & destination not connected by rail(partly/fully) and not connected by other recognised public transport system also
Providing Proof for LTA
Employers usually don't have to submit proof of travel to tax authorities while assessing travel allowance claims. Even though it is not considered mandatory for employers to collect proof of travel from the employees, they still have the right to demand documentary proof if needed.
The employee is advised to keep proof of their travel such as boarding passes, flight tickets, invoice of a travel agent, duty pass, and other documentary proof in case the assessing officer or the employer demands for it.
Calculation of Leave Travel Allowance
An employee can make LTA claim for two journeys in a block of four years. These block years are different from Financial Years and created by Income Tax Department.
Currently, we are in the block year of 1st January 2014- 31st December 2017. In this block year, an employee can claim LTA for two journeys that have occurred during 2014-17, however, if the employee has not made any claims, then the exemption gets moved to the next year and not to the next block.
Only the travel or ticket fare is considered for exemption, any expense incurred for the stay, food, sightseeing, etc. is not eligible for LTA.
Credit score
Conditions for Claiming LTA
The following are the requirements or conditions for claiming the exemption:
Actual journey is mandatory to be exempted.
If you are travelling withing India, then it is eligible for tax exemption. However, international travel is not eligible for tax exemption.
The tax exemption is eligible for employee and their families, including the employee’s spouse, children, and dependent parents and siblings.
How to Claim Leave Travel Allowance (LTA)?
LTA is not frequently included in the pay scale. Hence, it is recommended to review your pay structure before considering making an LTA claim. The LTA amount can vary from one employee to the next, but if you meet the requirements, you must provide tickets or bills and give them to your employer.
The dates for LTA claims will be explicitly announced by each firm; after that, you must complete the necessary forms, attach the necessary paperwork (such as trip tickets and boarding permits), and send the packet to your HR or accounting team. Before the employer determines the final tax liability, an employee must submit an LTA claim.
Applicable LTA Deductions
Based on the salary structure, you can claim for LTA exemption only to a certain extent. The LTA can be claimed under the following circumstances:
Travel by air - When the destination is connected by air, the exemption is allowed for ticket fares of a national airline's economy class.
Travel by train - When the destination is also connected by train, the exemption is allowed for AC first-class tickets.
Travel by other modes of transport - If the destination is not connected by air or rail, an amount equivalent to first-class, deluxe, or AC first-class fare, whichever is lower, can be claimed for exemption under LTA.
The LTA deductions will be considered only for the shortest route to the destination and back. If an employee is entitled to an LTA amount of Rs.30,000 but he/she has claimed only for Rs.20,000, the applicable LTA deduction will be for Rs.20,000 and the remaining Rs.10,000 will be added to your income which will be accountable for tax liability.
Credit score
Tax Rebate on LTA
In instances where you are not able to make the LTA claim within the year, you can move it to the next year. However, LTA exemption is not part of the Income Tax Return filing. Your employer will certify your LTA claim and add it to form 16.
LTA can be availed under the below-mentioned circumstances:
Only the employee's actual travel expenses are exempt from the rule. The full trip's expenses, including possible charges for dining, shopping, and other expenses, are not eligible for the tax exemption.
The exemption does not apply to more than two of the person's children who were born after 1 October 1998. There can only be two trips within a period of four years that qualify for the exemption.
The present period spans the years 2014 to 2017. The exemption may be carried over to the following block if the person does not use it during current one.
Given below is a list of expenses that is exempted under Leave Travel Allowance
Travel by air- Economic air fare by the shortest route or amount spent will be exempted depending on whichever is lesser.
Travel by rail- A.C. first class fare by the shortest route or the amount spent on travel will be exempted depending on whichever is lesser.
Place of origin and destination place of journey connected by rail but journey performed by other mode of transport
Place of origin & destination not connected by rail(partly/fully) but connected by other recognised public transport system
Place of origin & destination not connected by rail(partly/fully) and not connected by other recognised public transport system also
Providing Proof for LTA
Employers usually don't have to submit proof of travel to tax authorities while assessing travel allowance claims. Even though it is not considered mandatory for employers to collect proof of travel from the employees, they still have the right to demand documentary proof if needed.
The employee is advised to keep proof of their travel such as boarding passes, flight tickets, invoice of a travel agent, duty pass, and other documentary proof in case the assessing officer or the employer demands for it.
Calculation of Leave Travel Allowance
An employee can make LTA claim for two journeys in a block of four years. These block years are different from Financial Years and created by Income Tax Department.
Currently, we are in the block year of 1st January 2014- 31st December 2017. In this block year, an employee can claim LTA for two journeys that have occurred during 2014-17, however, if the employee has not made any claims, then the exemption gets moved to the next year and not to the next block.
Only the travel or ticket fare is considered for exemption, any expense incurred for the stay, food, sightseeing, etc. is not eligible for LTA.
Credit score
Conditions for Claiming LTA
The following are the requirements or conditions for claiming the exemption:
Actual journey is mandatory to be exempted.
If you are travelling withing India, then it is eligible for tax exemption. However, international travel is not eligible for tax exemption.
The tax exemption is eligible for employee and their families, including the employee’s spouse, children, and dependent parents and siblings.
How to Claim Leave Travel Allowance (LTA)?
LTA is not frequently included in the pay scale. Hence, it is recommended to review your pay structure before considering making an LTA claim. The LTA amount can vary from one employee to the next, but if you meet the requirements, you must provide tickets or bills and give them to your employer.
The dates for LTA claims will be explicitly announced by each firm; after that, you must complete the necessary forms, attach the necessary paperwork (such as trip tickets and boarding permits), and send the packet to your HR or accounting team. Before the employer determines the final tax liability, an employee must submit an LTA claim.
Applicable LTA Deductions
Based on the salary structure, you can claim for LTA exemption only to a certain extent. The LTA can be claimed under the following circumstances:
Travel by air - When the destination is connected by air, the exemption is allowed for ticket fares of a national airline's economy class.
Travel by train - When the destination is also connected by train, the exemption is allowed for AC first-class tickets.
Travel by other modes of transport - If the destination is not connected by air or rail, an amount equivalent to first-class, deluxe, or AC first-class fare, whichever is lower, can be claimed for exemption under LTA.
The LTA deductions will be considered only for the shortest route to the destination and back. If an employee is entitled to an LTA amount of Rs.30,000 but he/she has claimed only for Rs.20,000, the applicable LTA deduction will be for Rs.20,000 and the remaining Rs.10,000 will be added to your income which will be accountable for tax liability.
Credit score
Tax Rebate on LTA
In instances where you are not able to make the LTA claim within the year, you can move it to the next year. However, LTA exemption is not part of the Income Tax Return filing. Your employer will certify your LTA claim and add it to form 16.
21 August 2023
Thanks for your valuable advise
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