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Lta exemption

Amit Saxena (Manager Accounts in Wave Industries Pvt.Ltd.) (33 Points)

12 May 2016

Sir please guide me, that I have to pay LTA and the place of Orign is Delhi but Employee had submitted bills for jurney between 09/08/15 to 31/08/15 which is mentioned below: 01-09/08 New Delhi to Hydrabad by Air 30234 02-10/08 Hydrabad to Bhadrachalam by Train 4572 03-13/08 Bhadrachalam to Hydrabad by Trail 4572 04-14/08 Hydrabad to Tirupati by Air 26560 05-17/08 Tirupati to Hydrabad by Air 26132 06-18/08 Hydrabad to Rajahmundry by Air 25824 07-20/08 Hydrabad to Vishakhapatnam by Air 20416 08-31/08 Vishakhapatnam to New Delhi by Air 30921 Total Travelling Bill submitted Rs.193711/- Kindly advise me the taxablity of said payment how much amount would be taxable and how much would be exempted.

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2 Replies

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 12 May 2016

Dear Amit,

You can Claim Full 193711/- as per supporting bills.

Detailed discussion on LTA in Below. i hope it will help u

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.

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 andoverseas destinations are not covered for exemption.

Further, exemption is not available for more than two children of an individual born after October 01, 1998.This restriction does not apply in respect of children born before this date,

No. The tax rules provide for an exemption only in respect of two journeys performed in a block of four calendar years. The current block runs from 2014-2017. If an individual does not use their exemption during any block on any one or on both occasions, their exemption can be carried over to the next block and used in the calendar year immediately following that block.

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Amit Saxena (Manager Accounts in Wave Industries Pvt.Ltd.) (33 Points)
Replied 12 May 2016

Sir

Thanks for your valuable advise but sir, can you please explain whether the whole amount of LTA Rs.193711 would be expemted or part may be,becasue there are four trips involved in one journey so whether we should calculate the air fare accoding to the farthest route or all trips may be claimed for expemption.