About leave travel allowance?

Hello,, i am doing an statutory audit of a company,, here HR dept. asked me about max. ceiling amount of LTA which a company can allow to its employees..... LET me clear it more,, every employee can take deduction of the 1.fare of shortest route,, 2.actual expenses made by him,, and the total amount can not exceed the amount specified by the company,,, i.e. if the actual expense is 20000 and company allows 10000, then the employee will get exemption of 10000 only,,,, now my question is-- how companies specifies that max. amount,, what are the rules of income tax on max. amount allowed amount by the company,, plz rply as soon as possible....