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Leave Travel Allowance (LTA) - Exemption Limit, Rules, How to Claim, Eligibility & Latest Updates

Updated on : Mar 22nd, 2024

The Income-tax Act, 1961 offers salaried individuals several tax exemptions, beyond deductions like LIC premiums and housing loan interest. While deductions reduce your total taxable income, exemptions exclude specific types of income from being taxed altogether. This allows employers to design an employee's Cost to Company (CTC) package in a tax-efficient manner.

One such exemption available to the salaried class under the law and widely used by employers is Leave Travel Allowance (LTA)/Leave Travel Concession (LTC). LTA exemption is also available for LTA received from former employer w.r.t travel after the retirement of service or termination of service. LTA can be claimed for any two years in a block of 4 years . The current block year for claiming LTA is 2022 to 2025.

Note: The tax exemption of leave travel allowance is not available in case you choose the new tax regime .

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance/Leave Travel Concession is a type of allowance given by an employer to their employee for travelling to any place in India: either on leave, after retirement or after the termination of his service. Though it sounds simple, many factors need to be kept in mind before you plan to claim an LTA exemption. Income tax provision has laid down rules for claiming exemption of LTA which are provided below.

Note: The red arrow shows the lower of the two amounts will be exempted. For instance, if you travel by air, the exemption amount will be either your actual travel costs or the cost of an economy class ticket, whichever is lower. The journey should be taken through the shortest route to the destination.

Who Can Claim LTA?

Only individuals can claim LTA for travel costs incurred for themselves and their family (Spouse, children, wholly or mainly dependent siblings, parents)

Conditions for Claiming LTA

Let us understand the conditions/requirements for claiming the exemption:

Individual must be an employee and should have an LTA component in CTC.
Actual journey is a must to claim the exemption
Only domestic travel is considered for exemption, i.e., travel within India. No international travel is covered under LTA/LTC
The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee.
Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiple births on a second occasion after having one child is also not affected by this restriction.

Amount of LTA/LTC Exemption

The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation, food, etc., are eligible for this exemption. The exemption is also limited to LTA provided by the employer.

For example, if LTA granted by the employer is Rs 30,000, and the actual travel cost incurred by the employee is Rs 20,000, then only Rs 20,000 will be available as an exemption and the balance of Rs 10,000 would be included in taxable salary income.

Exemption w.r.t Various Modes of Transport

Can lta exemption be claimed on every vacation.

No, an LTA exemption is available for only two journeys performed in a block of four calendar years .

A block year is different from a financial year and is decided by the Government for LTA exemption purposes. It comprises 4 years each. The very first 4-year block commenced in 1986. The list of block years is 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09, 2010-13 and so on. The block applicable for the current period is 2022-25. The previous block was the calendar year 2018-21.

Carryover of Unclaimed LTA/LTC

In case an employee has not availed exemption with respect to one or two journeys in any of the block of 4 years, he is allowed to carryover such exemption to the next block provided he avails this benefit, in the first calendar year of the immediately succeeding block.

Consider the below example for a better understanding:

• Where carry over exemption is claimed in the first calendar year of the immediately succeeding block

• Where carry over exemption is not claimed in the first calendar year of the immediately succeeding block

Procedure to Claim LTA

The procedure to claim LTA is generally employer specific. Every employer announces the due date within which LTA can be claimed by the employees and may require employees to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent etc., along with the mandatory declaration. Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit them to the employer based on the LTA policy of the company to tax authorities on demand.

Multi-Destination Journey

Income tax provision provides exemption w.r.t travel cost incurred on leave to any place in India. Conditions pertaining to the mode of transport also refer to the place of ‘origin’ to the place of ‘destination’ and the route which must be the shortest available route.

Hence, if an employee travels to different places in a single vacation, the exemption can only be availed for the travel cost eligible from the place of origin to the farthest place in the vacation by the shortest possible route.

LTA Exemption for Vacation on Holidays

Many organisations that go strictly by the wordings of the income tax provision are allowing employees to claim LTA only if the employee applies for leaves and travel during that time. Such organisations may reject LTA claims for travel on official holidays or weekends.

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Frequently Asked Questions

The amount of LTA/LTC exemption depends on the LTA/LTC component in your compensation package or CTC. You can furnish proof of travel within the block period and claim up to the amount prescribed in your CTC.

The latest block period of four years is from 1 January 2022 until 31 December 2025.

You can claim LTA/LTC exemption only for one trip in one calendar year.

You can claim LTA/LTC benefit for the travel costs of yourself and your family consisting of your spouse, children, dependent parents, brothers, and sisters of the employee.

No, LTC is taxable in case of new tax regime and exempted if chosen to pay tax under old tax regime by fulfilling the required criteria.

Exemption will be available in respect of 2 journeys performed in a block of 4 calendar years.

Yes, you can avail LTC in current block (2022-2025), if you have not availed LTC in previous block. (2018-2021). Where such travel concession or assistance is not availed by the individual during any block of 4 calendar years, one such un-availed LTC will be carried forward to the immediately succeeding block of 4 calendar years and will be eligible for exemption.

Below example gives you clear understanding :

Example : An employee does not avail any LTC for the block 2018-21. He is allowed to carry forward maximum one un-availed LTC to be used in the succeeding block of 2022-25. Accordingly, if he avails LTC in April, 2023, the same will be treated as having availed in respect of the block 2018-2021. Therefore, he will be eligible for exemption in respect of that journey and two more journeys can be further availed in respect of the block of 2022-25.

Illustration : Mr. D went on a holiday on 25.12.2023 to Delhi with his wife and three children (one son – age 5 years; twin daughters – age 3 years). They went by flight (economy class) and the total cost of tickets reimbursed by his employer was 60,000 (45,000 for adults and 15,000 for the three minor children). Compute the amount of LTC exempt if Mr. D chose to pay taxes under old regime.

Solution : Since the son’s age is more than the twin daughters, Mr. D can avail exemption for all his three children. The restriction of two children is not applicable to multiple births after one child. The holiday being in India and the journey being performed by air (economy class), the entire reimbursement met by the employer is fully exempt in the hands of Mr. D, since he chose to pay taxes under the old regime.

In the above illustration, will there be any difference if among his three children the twins were 5 years old and the son 3 years old?

Since the twins’ age is more than the son, Mr. D cannot avail for exemption for all his three children. LTC exemption can be availed in respect of only two children.

Taxable LTC = 15,000 × 1/3 = 5,000.

LTC exempt would be only 55,000 (i.e. 60,000 – 5,000).

About the Author

Ektha Surana

Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more

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How to Claim Your Leave Travel Allowance?
Post author: fincart
Post published: October 20, 2023
Post category: Income Tax

Table of Contents

We all like traveling these days, don’t we? Every year we all plan to make at least one trip. But little do we know that we could claim one of the allowances if provided by your employer. It could also help you to save taxes too! But how do you claim it? Can you claim it every year? How much amount does it cover? What is included in this? Is there an eligibility criterion to claim this allowance?

Tax deductions and exemptions provided by the Income Tax department have allowed us to save the most amount of tax possible. By using these exemptions, employers can structure employee Cost to Company (CTC) in a tax-efficient manner. Leave Travel Allowance (LTA) is an exemption available to salaried workers under the law that is also widely used by employers.

When planning travel to claim an LTA exemption, many factors need to be considered. LTA exemptions are governed by income tax provisions:

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance (LTA) is an allowance provided by employers to employees who are on leave from work to cover their travel expenses. By the Income Tax Act, of 1; 961, LTAs are an important component of an employee’s salary, as they are eligible for income tax exemptions, making them a valuable tool for tax saving . LTA received by the employee during the year will not be included in his net income under Section 10(5) of the Income Tax Act.

Example of LTA

Assume that LTA granted by your employer is Rs 30,000, and the actual travel cost is Rs 20,000, then only Rs 20,000 will be available as an exemption and the balance of Rs 10,000 would be included in taxable salary.

Take another example, suppose the Leave Travel Allowance provided by the employer is Rs 25,000. The actual expenses spent on travel are Rs 30,000. Here, the LTA exemption allowed would be Rs 25,000 irrespective of a higher amount spent on travel.

Benefits of Leave Travel Allowance

Tax Exemption : LTA provides tax benefits as the amount spent on eligible travel expenses is exempt from income tax.

Family Inclusion : The allowance covers immediate family members, promoting family travel and bonding.

Domestic Exploration : Encourages employees to explore different parts of India, contributing to tourism and cultural exchange.

Reimbursement : Allows reimbursement of actual travel expenses or up to specified limits, easing financial burden on employees.

Employee Well-being : Promotes work-life balance by facilitating quality time with family during approved leave periods.

Conditions to claim Leave Travel Allowance exemption

The following conditions must be satisfied for claiming an LTA exemption:

You can claim LTA for travel costs incurred for yourself and your family.
LTA can be claimed for any two years in a block of 4 years. The current block year for claiming LTA is 2022 to 2025.
Actual journey is a must to claim the exemption.
The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. Local conveyance, sightseeing, hotel accommodation, food, etc., are not eligible.
The exemption is also limited to LTA provided by the employer.
It applies to travel only within the country.

What is the eligibility of LTA exemption?

The LTA (Leave Travel Allowance) exemption for tax purposes is based on the actual travel cost. It covers expenses for a journey from the employee’s origin to the destination and back, using the shortest route by air, rail, or bus. Only the cost of travel tickets is eligible for exemption. Other expenses like conveyance, sightseeing, accommodation, shopping, and food are not allowed. If the employer’s LTA allowance is less than the actual travel cost, the exemption is limited to the employer’s provided amount.

Documents required for claiming LTA

To claim LTA, fill out the LTA application form supplied by your employer, including essential details like travel date, destination, mode of transport, and incurred costs. Alongside the application, submit supporting documents such as tickets, boarding passes, and invoices as evidence for your LTA claim. These documents are crucial to validate your travel expenses and support your application.

LTA Exemption Rules for Various Modes of Transport

The LTA claim depends on the mode of transport.

If travel is by air, the LTA limit is Actual Expenses or Economy class air fare of the national carrier by the shortest route to the place of destination, whichever is lower.
If travel is by rail, the LTA limit is Actual Expenses or first-class AC rail fare by the shortest route to the place of destination, whichever is lower.
If travel is by a recognized public transport system, the LTA limit is Actual Expenses or 1st class/ deluxe class fare by the shortest route to the place of destination, whichever is lower.
If no recognized public transport system is available, the LTA limit is Actual Expenses or first-class rail fare by the shortest route to the place of destination, whichever is lower. (It is assumed as if the journey had been performed by rail.)

How Much Leave Travel Allowance Exemption Will You Get?

There is a limit on how much LTA an employer may provide as an exemption. For instance, if Rs. 30,000 of LTA is granted by your employer and the actual travel cost incurred is Rs. 20,000 by an employee then the exemption will only be available till Rs. 20,000. Therefore the balance of Rs. 10,000 will be included in the taxable salary income. Procedure to Claim LTA

LTA claims are generally handled by employers. Employers announce the deadline for employees to claim LTA and may require employees to submit proof of travel along with the mandatory declaration, such as tickets, boarding passes, invoices from travel agents, etc. Although employers don’t need to collect proof of travel, it is always advisable for employees to keep copies for their records as well as to submit them to their employer on demand based on the LTA policy of the company.

What Happens to LTA If There is No Traveling Involved?

Because the LTA is part of your salary structure, it is automatically credited to your account regularly. If you do not travel or do not have valid proof of travel, you cannot claim the LTA received for tax exemption purposes. Your net taxable income will be increased if you receive an LTA.

What expenses can be included under LTA?

Under the Income Tax Act, LTA (Leave Travel Allowance) can include the following expenses:

Travel Expenses : LTA encompasses the travel costs for the employee and their immediate family members (spouse, children, and dependent parents or siblings). The travel can be by air, rail, or public transportation, following the employer’s or Income Tax Department’s specified rules.

Destination : LTA is applicable for travel within India. Employees can claim expenses incurred on traveling to any location in India during their leave period.

Mode of Travel : LTA covers expenses for travel by air, train, or other public transportation. Reimbursement is based on the actual amount spent or as per limits set by the employer or tax authorities.

Leave Period : LTA can be claimed for travel during the employee’s leave period, including annual leave, casual leave, or any other approved form of leave.

Unclaimed LTA

Unclaimed LTA is allowed to be carried forward. If an employee has not availed LTA exemption once or twice in a block of 4 years, he is allowed to carryover one exemption to the next block provided he avails this benefit, in the first calendar year of immediately succeeding block.

For example, during the 4-year block of 2014-2017, if you did not claim LTA or claimed it only once, then you will be allowed to carry forward one LTA to 2018 (first year of next block, i.e. 2018-21). Thus, from 2018 to 2021, you will be able to claim LTA three times.

Can Unclaimed LTA be Carried Over to the Next Block Year?

Under the carry-over concession rules, under which the employee can claim LTA tax breaks on three journeys made in the current block of years if he hasn’t claimed LTA in the last running block or has just claimed it once, the employee can still claim one additional LTA in the next block of calendar years. To utilize the carryover concession facility, one LTA exemption for the journey must be claimed during the first calendar year of the next block.

For instance, in the last block of the year, between 2018-2021, you made only one tax exemption claim under LTA as an employee. Therefore, you become eligible for LTA claims for up to 3 journeys in the current block, between 2022 and 2025. However, your first claim must be filed in the first calendar year of the current block, i.e. in 2022.

Also Read: Smart Tax Planning Strategies for High Earners

Leave travel allowance is an amount provided by the employer to the employee for Travelling while on Leave. This is a part of your salary which is exempted from tax.

Employees in India are generally eligible for LTA. To claim LTA, employees must undertake travel during their leave period, and the exemption is subject to specified conditions and limits set by the income tax regulations.

Under LTA, expenses related to travel within India are covered. This includes the cost of transportation by air, rail, or bus for the employee and eligible family members.

LTA can be claimed for two journeys in a block of four years and not on every financial year.

The concept of “block years” in the context of LTA (Leave Travel Allowance) refers to a four-year block set by the income tax authorities. This block consists of four consecutive calendar years, during which an employee is allowed to claim LTA for up to two trips.

No, LTA (Leave Travel Allowance) is specifically applicable for domestic travel within India.

For LTA exemption, the costs incurred for family members traveling with the employee are allowed. Family members include spouses, children, dependent parents, and dependent siblings.

The exemption can be claimed for up to two children if born on or after 1st October 1998.

LTA exemption is calculated as the least of the actual travel expenses incurred on a trip within India or the fare of the equivalent journey by the shortest route in the chosen mode of transportation (air, rail, or bus). Again, it is limited to the LTA component in your compensation package or CTC.

If an employee doesn’t travel at all or lacks valid proof of travel, they cannot claim LTA for tax exemption purposes. In such a scenario, the received LTA amount is treated as a part of the employee’s taxable income.

If an employee does not fully utilize their LTA entitlement in a particular block of four years, it can be carried over to the next block. But the employee is usually required to utilize this carryover LTA in the first calendar year of the immediately succeeding block.

If the unutilized LTA is not claimed within the first year of the next block, it will expire and would not be allowed to be claimed later on.

Yes, there is a specific deadline for employees to claim LTA. Usually, LTA can be claimed for exemption twice under the block of 4 years.

No, LTA (Leave Travel Allowance) is specifically designed for personal travel during leave periods and cannot be claimed for business trips or official travel.

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LTA (Leave Travel Allowance): Meaning, Rules, Tax Exemptions and Conditions to claim

Hiral Vakil

Travelling offers a wide range of benefits. Taking time away from daily routine can reduce stress and improve mental and emotional well-being. However, vacations can be expensive. Income Tax provides various exemptions on such expenses to salaried individuals. One such exemption available is LTA i.e. Leave Travel Allowance. LTA is an allowance employers give to their staff for vacations in India.

LTA: Meaning

Conditions to claim lta exemption, leave travel exemption: eligibility, how to claim exemption on leave travel allowance.

Leave Travel Allowance is an allowance employers give to their employees as a part of CTC for travelling alone or with family to any place in India :

either on leave or
after retirement from service or
after termination of service.

Income tax has laid down rules for claiming exemption of LTA.

Section 10(5) of the Income Tax Act along with Rule 2B has prescribed the conditions and limit of exempt leave travel allowance.

Leave travel allowance should be a part of the employee’s salary structure.
An exemption is available for actual expenses incurred by the employee including their family for domestic travel only.
Spouse and children
Parents, brothers, and sisters who are wholly or mostly dependent on the employee.
Further, this exemption can be claimed for a maximum of two children born after 01/10/1998. For children born prior to this date, there is no restriction.
It covers only the cost of travel for the trip (travel by rail, air or any other public transport). It does not cover the cost of hotel accommodation, food, etc.
An exemption is available only for two trips in a block of four calendar years . The current block for leave travel is from 2022 to 2025.
If an exemption is not availed during the block period, it can be carried over to the next block and used in the first year of the next block.

Let’s understand with an example:

Let’s say, an employee does not avail Leave Travel allowance for the block of 2018-2021. He is allowed to carry forward a maximum of one unavailed LTA to be used in the succeeding block of 2022-2025. Accordingly, if he avails LTA in April 2022, the same will be considered for the block of 2018-2021. Therefore, he will be eligible for exemption in respect of that journey and two more journeys can be further availed in respect of the block 2022-2025.

The LTA exemption is available only on the actual travel costs. Expenses such as sightseeing, hotel accommodation, food, etc are not eligible for this exemption. It is also limited to the LTA provided by the employer. For example: If the actual expense incurred is INR 50,000 but LTA as part of Salary is INR 35,000 then the maximum exemption available would be INR 35,000 only.

Exemption when various modes of transport are used for travel

Employees can claim Leave Travel Allowance exemption by submitting details in Form 12BB . They should submit the proof in support of their claim. Further employees can submit boarding passes, air tickets, train tickets, invoices from travel agents, etc, as documentary proof to their employers.

No, LTA can be claimed only for domestic travel. You can only claim LTA if the Employer provides it as part of your salary.

If an employee travels to different locations on a single vacation then the exemption available will be for the travel cost eligible from the place of origin to the farthest location by the shortest route possible.

It depends on the organisation’s policies as many companies allow LTA exemption only if employees take specific leave for vacation and not on official holidays or weekends.

No, You can claim LTA exemption only twice in a block of 4 calendar years. The current block of four years is 2022-2025.

Employees are advised to maintain proof such as flight tickets, invoices from travel agents, passes, etc. as they have to be submitted to the employer.

Employees can know the exempt Leave Travel Allowance amount from Form 16 issued by the employer at the end of the financial year. It is exempt u/s 10(5) of the Income Tax Act.

Since Leave Travel Allowance is a part of salary income, an employee can file ITR-1 while claiming exempt LTA. However, salaried need to file ITR-2 if their income is more than Rs. 50,00,000.

Got Questions? Ask Away!

Hey @sushil_verma

There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens ) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA) , conveyance , transport allowance, medical reimbursement , etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).

Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).

As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

No issues. You’re welcome!

Hey @shindeonkar95

In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.

Hope, it helps!

Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?

There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?

I couldn’t find anything on this. Any help is appreciated.

Hello @Veejayy ,

Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.

Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.

These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!

Also, interest earned on these bonds will be taxable.

Hope this helps!

Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total

Hey @Sheirsh_Saxena , yes, the investment amount needs to be added under 80C.

Continue the conversation on TaxQ&A

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Last Updated on 5 months by Shreya Sharma

Written by admin • December 21, 2023 • 11:08 am • Payrolling

Leave Travel Allowance (LTA) – Rules, Claims, Exemption and Eligibility

Table of Contents

Leave Travel Allowance (LTA) is a financial benefit for all employees. It helps cover domestic travel expenses for two trips in a block of four financial years. The LTA amount is tax-free. It is one of the best tax-saving tools available to an employee. It is a tax exemption employers offer to their employees.

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance is an allowance employers offer their employees for domestic travel. This allowance allows employees to take a vacation where travel costs are tax-free. LTA is available for any two years within a four-year block. Employees must submit the bills and travel documents to their employer to take advantage of the LTA tax benefit.

People who can Claim Leave Travel Allowance (LTA)

Only employees and their spouses, children, dependent siblings and parents can claim LTA. This exemption does not apply to more than two of an employee’s children if they are born after October 1 1998.

Rules for Claiming LTA

The rules for claiming LTA are as follows:

LTA does not cover international travel. Employees can only use domestic trips to make the claim.
The employee’s family members are also allowed to use LTA to cover the cost of their travel. The family members for this purpose include spouses, up to two children(if born after October 1 1998), dependent parents and siblings.
The employee’s salary structure must mention the LTA.
Only the cost of travel is taken into consideration for tax exemption. No other expenses like hotel accommodation, food, or shopping qualify for this exemption.
An employee can claim LTA two times in a block of four years.
LTA can be claimed for travel by any mode of transport, like air, train, or road.
If LTA isn’t claimed in a particular block of four years, it can be carried over to the next block.

Eligibility for Leave Travel Allowance (LTA)

Only the cost of travel of an employee is eligible for claiming LTA. Expenses such as local sightseeing, hotel accommodation, food, shopping, etc., are not eligible for this exemption. If the LTA provided by the employer is less than the actual cost of travelling, the exemption will be limited to the LTA amount specified by the employer rather than the actual cost.

For example, if the employer offers an LTA of Rs. 25,000 and the employee’s travel costs Rs. 35,000, an LTA exemption can only be claimed for Rs. 25,000.

LTA Exemption for Various Modes of Transportation

Travel by air: If an employee travels by air, the exemption would be the economy class airfare by the shortest route to the travel destination.
Travel by train: If an employee travels by train, the exemption would be the fare of an AC first-class train ticket for the shortest route.
Travel by other modes of transportation: If the destination is not connected by air or train, the exemption would be the fare of an AC first-class train ticket for the distance of the journey for the shortest route, whether connected by train or not.

LTA for Multi-Destination Trips

If an employee goes on vacation and visits multiple cities, in that case, the exemption will cover the cost of round-trip travel from their home city to the farthest city they visit and back. In other words, the LTA will cover the most expensive leg of their journey.

For example, suppose the employee resides in Delhi and travels to Mumbai, Goa, and Chennai for vacation. In that case, round-trip travel from Delhi to Mumbai is Rs. 4,000, from Delhi to Goa is Rs. 5,000, and from Delhi to Chennai is Rs. 7,000. In this scenario, the LTA exemption would be Rs. 7,000, which is the cost of the round-trip travel from Delhi to Chennai and back. Even though the employee visited multiple cities, the LTA will cover the expense of the farthest city visited and the return journey, which in this case is Chennai.

Claiming LTA in case of a Job Change

An LTA exemption would be available even if an employee changes their job. If the change happens within the block and there is any unutilized LTA, it can be claimed with the new employer. However, if the employee has already availed of the LTA, it would not be allowed by their new employer.

Unclaimed LTA

LTA exemption is available for two trips in a block of four years. However, if the employee does not take two trips within the four-year block, only one unutilized LTA is carried forward to the next block of years. However, to claim the unutilized LTA, the employee must take a trip in the first calendar year of the next block; otherwise, it will expire.

LTA Exemption for Vacation on Holiday

Under the Income Tax Act 1961, the LTA exemption is only allowed when an employee applies for a leave from work and then travels on vacation. Employees who take their vacation on official holidays or weekends cannot claim LTA.

Documents Required for Claiming LTA

Documents like the LTA form and proof of travel, such as tickets and boarding passes, are required to claim LTA.

Procedure to Claim LTA

Every employer announces the due date before which employees can claim LTA and may ask employees to submit proof of travel, such as tickets, boarding passes, invoices provided by travel agents, etc., along with the mandatory declaration. Though employers don’t need to collect proof of travel, it is always prudent for employees to keep copies for their records and submit them to the employer based on the company’s LTA policy or to the tax authorities on demand.

It is crucial for employees to meticulously document their travels, be aware of submission deadlines, and stay up to date with any changes in regulations. Understanding LTA provides potential tax savings and the opportunity to explore new destinations. As you embark on your next adventure, confidently navigate the roads, armed with the understanding of how to make the most of your Leave Travel Allowance. Safe travels!

FAQs about Leave Travel Allowance (LTA)

What does leave travel allowance cover.

Leave Travel Allowance covers the travel expenses incurred during a trip.

How many times can an employee claim Leave Travel Allowance?

An employee can claim LTA only twice in a block of four years.

Is international travel covered under Leave Travel Allowance?

No, international travel is not covered under Leave Travel Allowance.

Which section of the Income Tax Act allows an exemption for LTA?

Section 10 (5) of the Income Tax Act, 1961 allows LTA exemption.

If an employee’s parents-in-law travel with him, would the travel costs for the parents-in-law be claimed as an exemption?

No, LTA exemption cannot be claimed for travel costs for the parents-in-law of an employee.

Can only the travel costs of the family members be claimed as LTA if the employee does not travel?

No LTA exemption would be allowed if the employee does not travel, even if their family members travel.

What would happen if the employee did not travel in a block of four years?

LTA exemption is prohibited if the employee does not travel in a block for four years. However, one unutilized LTA can be carried forward to the next block.

Can I claim an LTA exemption twice in one financial year?

No, only one LTA exemption can be claimed in one financial year.

What is the latest block period to claim LTA exemption?

The latest block period to claim LTA exemption is from January 1 2022, until December 31 2025.

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What is LTA? – Eligibility Criteria, Process, Calculation, & More

Introduced in 1986, the LTA scheme was initially rolled out for the government and public sector undertaking employees in India. Later, private sector employees were included in it too. Since then a number of employees have utilized the LTA scheme for their travel expenses. If you are a salaried employee going on leave soon, make sure you are well-versed with LTA.

This blog will help you understand what is LTA , the eligibility criteria to claim it, the procedure, conditions, and documents required, and even the restrictions and benefits of LTA.

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What is Leave Travel Allowance (LTA) in Salary ?

Leave Travel Allowance or LTA is an allowance that employers pay to their employees when the latter is on leave and traveling, either alone or with family within India. The amount paid to the employee as LTA is tax-free subject to certain conditions.

The conditions and amount of the leave travel allowance are given in Section 10(5) of the Income Tax Act, 1961 along with Rule 2B of Income Tax Rules. It is important to note that employees who have opted for the new tax regime are not eligible to claim LTA. Learn personal finance to expand your knowledge on taxation and savings to manage your finances better.

Eligibility Criteria for LTA Exemption

The eligibility criteria that the employees must meet to claim leave travel allowance are as follows:

The exemption is for salaried employees who have incurred expenses on travel.
The travel destination must be within India since international travel is not included in the exemption.
Only those employees who have taken a leave from work for the purpose of travel can make an LTA claim .
Employees can claim LTA for a maximum of two journeys undertaken in a block of four calendar years. The current block of travel is from 2022 to 2025.
Employees should possess proof of travel expenses in the form of boarding passes, hotel bills, etc.
LTA exemption can be claimed only within the specified period, after which it is deemed to lapse.

Procedure to Claim LTA

The procedure to claim LTA is simple. Follow these steps to claim LTA in salary:

Check Your Eligibility- Ensure you are eligible to claim LTA according to your employer’s policies as well. There is a minimum number of years of service requirement, specified by the employer before you can claim any exemption. Hence, check it before applying for LTA.
Plan Your Travel- To avoid any last-minute problems, make sure to plan your travel and keep proof of every travel expense, especially the tickets and the boarding passes.
Apply for LTA- In the LTA application form provided by the employer, fill out all the details such as date of travel, mode of travel, destination, costs incurred, number of family members, etc.
Attach Relevant Proof Documents- Attach the travel proofs that you have collected with your LTA application.
Await Approval and Reimbursement- Now all you have to do is wait for your LTA claim application to be approved and then the reimbursement. Employers can either combine the LTA allowance with the salary or as a separate payment for reimbursement.

NOTE: An important point that the employees should keep in mind is that if only one LTA is claimed out of two within the block year, then the employee can claim the unused one in the next block. But this travel journey has to be made in the first calendar year of the next block, after which the unutilized LTA will expire.

Documents Required for LTA Claim

The following are the documents required to be submitted by salaried employees to their employers:

Travel tickets (for train, road, or air)
Proof of expenses such as boarding passes, hotel bills, cab receipts, etc.
Leave approval application showing that the leave was taken to travel.
LTA form duly filled in by the employee, detailing the exempt amount being claimed. It is provided by the employer.
Travel itinerary that outlines the places traveled and the duration of travel.
PAN card details of the employee are to be provided to the employer.
Bank account details for receiving reimbursement for travel expenses.

Conditions for Claiming LTA

There are certain conditions that the employees must fulfill to claim LTA. These are as follows:

The employee must actually travel to claim LTA.
The family members covered under the rules are spouses, children, dependent parents, and dependent siblings. They must be traveling with the employee and not separately.
The salary structure of the employee must contain LTA components.
Only two children born on or after 1st October 1998 are covered under the exemption. There is no restriction regarding children born before this date.
The LTA claim can be made for any mode of travel, that is, by road, train, or air.

LTA Exemption Rules for Various Modes of Transport

LTA covers the various modes of transport for travel. Refer to the given table to understand the exemption rules for different modes of transport:

How is LTA Calculated?

Here are the steps followed to calculate the LTA:

First employee’s eligibility is checked based on the conditions prescribed in the employer’s policy and IncomeTax Act,1961.
Then the cost of travel for the employee and their family members is calculated.
Now the maximum LTA exemption is calculated. The calculation is based on the fare for the shortest route to the destination by economy class of the national carrier.
Note that if the cost of travel is less than the maximum LTA calculated, then an exemption can be claimed for the actual cost of travel.
But if the cost of travel is more than the maximum LTA calculated, then an amount only up to the maximum LTA exempt amount can be claimed. The excesses can be claimed as taxable income.
Once we have the final amount after all the calculations, the exemption amount is deducted from the employee’s taxable income.

LTA Claim Restrictions

Though LTA is a beneficial tax exemption for employees, there are certain restrictions as well. These are:

LTA can be claimed only for domestic travel, that is, within the country, and not on international travel.
The number of times you can claim LTA is limited.
Employees need to maintain proof of travel which can be a task for some.
LTA exemption covers only the actual travel expenses and not the other expenses such as hotel accommodation and food bills.
No LTA can be claimed can be made on cash payments. You will only get an LTA allowance on payments made through bank accounts online, cheques, or any digital payment mode .

Benefits of LTA

The following are some important benefits of LTA in salary:

LTA is an essential source of saving tax.
It encourages tourism and aids the travel industry.
It also helps in cost optimization as the employees do not have to spend much. They also plan to keep in mind the allowance they will receive and the best options they have for other expenses.
LTA plays a role in maintaining the work-life balance as the employees can travel with their families and spend some time with them.
The LTA exemption claim is also flexible as it includes the travel expenses of the accompanying family members as well. Also, you can choose the mode of travel according to your requirement since all three–train, air, and road are covered under LTA.

We have discussed what is LTA , the eligibility to receive LTA allowance, the procedure to claim LTA, the documents required, the conditions to be met, how it is calculated, and the restrictions and benefits of LTA. All of this information will help you in proceeding with your LTA application comfortably.

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LTA amount is tax free. LTA is exempt from taxes under the income tax act. Given here are some interesting and relevant aspects about Leave Travel Allowance which you as a salaried employee must keep in mind. Exemption of Fare Only – LTA exemption can be claimed when 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 stay and other expenses is not covered, only the travelling cost is covered.

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.

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

Exemption on Actual Travel Expense – For example, where an employer provides LTA of INR 40,000, but an employee spends only INR 30,000 on the travel cost, then the exemption is limited to only INR 30,000. Travel cost means the cost of travel and does not include any other expenses such as food, hotel stay etc.

Restriction on Number of Child for Claiming LTA – 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, and also in cases where an individual, after having one child, begets multiple children (twins or triplets or quadruplets, etc.) on the second occasion. The term “Child” includes a step-child and an adopted child of the individual.

Is exemption available every year?

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.

In such cases, the journey performed to claim such exemption will not be counted for the purposes of regulating future exemptions allowable for the succeeding block. For example, Mr. X joins an organization on April 1, 2012 and is entitled to an LTA of Rs 40,000 per annum (financial year 2012-13). X undertook a journey in December 2012 and used his exemption. However, for his LTA entitlement for 2013-14, he did not undertake a journey during the calendar year 2013.

He can undertake the journey in 2014 to claim the exemption in relation to the LTA. He would also be able to use the LTA benefit for two other journeys which he can undertake in the current block 2014-17 in relation to his LTA entitlement for future years.

Proof of travel

Employers while assessing the travel allowance claims do not need to collect proof of travel to submit to the tax authorities.

Though it is not mandatory for employers to demand proof, they still have the right to demand documentary proof depending on its policy. The assessing officer can still ask for the employee to provide details of travel.

The individual however needs to keep copies for his or her own records. Such proofs are helpful at the time of the audit of the tax return of the individual.

Proof of travel could be, for example, tickets, boarding passes, invoice of travel agent, duty slip etc. Does claiming LTA in alternate years mean that the two year entitlement gets added together?

It does. If you are entitled to an LTA of INR20,000 per year and do not utilize it for the first year it is carried forward to the next year. In the second year you can claim the entire amount (INR40,000 i.e. 20,000 + 20,000) as tax exempt provided you spend it according to the specification in LTA tax laws as detailed above.

Carry over concession for Leave Travel Allowance – Leave Travel Allowance (LTA) comes with a carry forward feature. You can carry forward your Leave Travel Allowance in the situation that it has not been used. It can be brought forward and claimed in the first year of the next block. However the LTA claim can be brought forward and claimed only in the first year of the next block.

Can I Claim LTA Twice in a Year – Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other in case your spouse is also working.

LTA in case of Switch of JOB – If you switch jobs, you can get the LTA not only from your present organization but also from your former employer, if the concession is lying unutilized. Let’s say that, in the 2010-13 block, you claimed LTA in 2011.

In 2012, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.

LTA is often the most unutilized of exemptions but which can let you save huge amount of taxes if claimed. So this time make sure that your holidays not only give you that much needed break but also save you taxes.

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Leave Travel Concession/Allowance (LTC/LTA)

Leave Travel Concession (LTC) is a type of benefit provided to employees by their employers to travel within the country during their leave period. The objective of this benefit is to encourage employees to take a break from work and explore new places while spending quality time with their family. The LTA/LTC scheme was introduced in the year 1986 by the Government of India to help employees working in government or public sector undertakings to travel and enjoy their time off. The scheme has since been extended to employees of private companies as well. Under the scheme, an employee can claim reimbursement for the travel expenses incurred during the leave period. The reimbursement is subject to certain conditions and restrictions, such as the distance of travel, the mode of transport used, the number of family members traveling, etc. The employee is required to submit the travel bills and other supporting documents to the employer to claim the reimbursement.

What is Leave Travel Allowance?

Leave Travel Concession (LTC) is a benefit provided by employers to their employees to travel within the country during their leave period. The objective of this benefit is to encourage employees to take a break from work and explore new places while spending quality time with their family.

Section 10(5) of the Income Tax Act, 1961 with Rule 2B ensures the exemption of tax and also details the conditions subject to tax exemption. Income tax provision has laid down rules for claiming exemption of LTC/LTA which are provided below.

Conditions for Claiming LTC/LTA

Let us understand the conditions/requirements for claiming the exemption.

Actual journey is a must to claim the exemption
Only domestic travel is considered for exemption, i.e., travel within India. No international travel is covered under LTC/LTA
The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee.
Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiple births on a second occasion after having one child is also not affected by this restriction.

Eligible LTC/LTA Exemption

For example, if LTA granted by the employer is Rs 30,000, and the actual eligible travel cost incurred by the employee is Rs 20,000, the exemption is available only to the extent of Rs 20,000, and the balance of Rs 10,000 would be included in taxable salary income.

Exemption w.r.t various modes of transport

Procedure to Claim LTC/LTA

Frequently Asked Questions

Who is eligible for LTA?

LTA/LTC is usually available to employees of government or public sector undertakings, as well as employees of private companies who have been granted this benefit by their employers.

What exactly does Leave Travel Allowance cover?

Leave Travel Allowance covers only the travel expense incurred during the travel.

Can LTA exemption be claimed for Vacation on Holidays?

How often can an employee claim LTA?

An employee can claim LTA/LTC twice in a block of four years. The current block of years is from 2022 to 2025.

What is the minimum trip duration under LTA/LTC?

According to Rule 8 of the Central Civil Services (Leave Travel Concession) Rules, 1988, an employee must undertake a journey of a minimum of three days to be eligible for the LTA/LTC benefit. The rule further states that the journey should be undertaken to a place that is different from the place of work and the employee’s residence. This rule applies to employees of the Central Government and is also followed by many State Governments and Public Sector Undertakings.

It is important to note that the LTA/LTC rules may vary for employees of private companies and other organizations. Employers may have their own guidelines and policies regarding the LTA/LTC scheme. Employees should check with their employer to understand the specific rules and conditions applicable to them.

How can an employee claim LTA/LTC?

To claim LTA/LTC, an employee must inform their employer about their proposed travel plans and apply for leave. The employee must then submit the travel bills and other supporting documents to the employer within a stipulated time frame. The employer verifies the documents and reimburses the employee for the eligible expenses.

What happens if an employee does not utilize the LTA/LTC benefit?

If an employee does not utilize the LTA/LTC benefit during the block of years, they can carry it forward to the next block of years. However, the employee must utilize the LTA/LTC benefit within the first year of the next block of years. If the benefit is not utilized within the stipulated time frame, it will lapse.

Can LTA/LTC be availed for international travel?

No, LTA/LTC can only be availed for domestic travel within India.

Can an employee claim LTA/LTC for travel to their hometown?

Yes, an employee can claim LTA/LTC for travel to their hometown, provided that the hometown is located at a distance from the place of work and the employee’s residence.

Can an employee claim LTA/LTC for travel during their probation period?

Generally, employees who are on probation are not eligible for LTA/LTC. However, some employers may have their own policies on this and may allow employees on probation to claim LTA/LTC.

Can an employee claim LTA/LTC for travel by a private car?

Yes, an employee can claim LTA/LTC for travel by a private car, subject to certain conditions. The reimbursement amount is usually limited to the amount that would have been paid if the employee had travelled by public transport.

Can an employee avail of LTA/LTC for travel during the notice period?

An employee can avail of LTA/LTC during the notice period, provided that they have already applied for and obtained leave for the travel period before the notice period begins.

Can an employee claim LTA/LTC for travel to attend a family function?

No, an employee cannot claim LTA/LTC for travel to attend a family function, such as a wedding or a funeral. LTA/LTC can only be availed for travel during the employee’s leave period for the purpose of leisure travel.

Can an employee carry forward unutilized LTA/LTC to the next block of years?

Yes, an employee can carry forward unutilized LTA/LTC to the next block of years, but they must utilize it within the first year of the next block of years.

Can an employee claim LTA/LTC for travel to a foreign country if they travel by land or sea from India?

No, an employee cannot claim LTA/LTC for travel to a foreign country even if they travel by land or sea from India. LTA/LTC is only applicable for travel within India.

Can an employee claim LTA/LTC for travel during a period of leave without pay?

No, an employee cannot claim LTA/LTC for travel during a period of leave without pay. LTA/LTC can only be availed during the employee’s leave period.

Is there a limit on the amount that can be claimed under LTA/LTC?

Yes, there is a limit on the amount that can be claimed under LTA/LTC. The reimbursement amount is usually limited to the actual expenses incurred by the employee, subject to certain conditions and restrictions.

Can an employee claim LTA/LTC for travel expenses incurred for their dependents?

Yes, an employee can claim LTA/LTC for travel expenses incurred for their dependents, such as their spouse, children, and parents. However, there may be restrictions on the number of dependents who can travel.

Can an employee claim LTA/LTC for travel to multiple destinations?

Yes, an employee can claim LTA/LTC for travel to multiple destinations, provided that the total cost of travel does not exceed the eligible amount.

Can an employee claim LTA/LTC for travel to attend a business conference or seminar?

No, an employee cannot claim LTA/LTC for travel to attend a business conference or seminar. LTA/LTC can only be availed for leisure travel during the employee’s leave period.

Can an employee claim LTA/LTC for travel by a rented vehicle?

Yes, an employee can claim LTA/LTC for travel by a rented vehicle, subject to certain conditions. The reimbursement amount is usually limited to the actual rental charges paid by the employee.

Can an employee claim LTA/LTC for travel if they are on medical leave?

No, an employee cannot claim LTA/LTC for travel if they are on medical leave. LTA/LTC can only be availed during the employee’s leave period for leisure travel.

Can an employee claim LTA/LTC for travel during the first year of their employment?

Generally, employees who are in their first year of employment are not eligible for LTA/LTC. However, some employers may have their own policies on this and may allow employees in their first year of employment to claim LTA/LTC.

Can an employee claim LTA/LTC for travel if they have resigned from their job?

An employee can claim LTA/LTC if they have resigned from their job, provided that they have already obtained leave for the travel period before their resignation. The reimbursement amount will be subject to certain conditions and restrictions.

Disclaimer: This document is strictly private, confidential and personal to its recipients and should not be copied, distributed or reproduced in whole or in part, nor passed to any third party. The views expressed in this write-up are matters based on our understanding of the law and regulations prevailing as at the date of this write-up and our past experience with the tax, regulatory and other authorities as may be applicable. However, there can be no assurance that the tax authorities or regulators will not take a position contrary to our views.

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Sir, we are given to understand that the journey should be performed by State run public transport wherever available. But your article says that the journey can be performed by private taxi. Can you please clarify this sir? We find it difficult to convince our employees when our top management says one thing and articles like this say something else.

Can wrongly mentioned BLOCK YEAR be rectified

The time limit to generate e-invoice on IRP for all tax invoices issued is within seven days it is applicable on May 1st. What If my invoice Date is on April 30th I should generate an e-invoice on IRP within 7 days?

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Leave Travel Allowance Exemption: A Comprehensive Guide

What is leave travel allowance, conditions to claim lta exemption, eligibility for lta exemption, quantum of lta exemption, lta exemption rules for various modes of transport, unclaimed lta, lta exemption in case of job change, lta for multi-destination travel, lta for vacations on holidays, expenses included under lta, procedure to claim lta, frequently asked questions.

Leave Travel Allowance (LTA) is a popular tax benefit provided by employers to their employees in India. It allows employees to save taxes on travel expenses incurred during their vacations within the country. In this comprehensive guide, we will delve deeper into the concept of LTA, how it works, and the rules and regulations surrounding it. Whether you're an employee looking to understand the benefits of LTA or an employer seeking to implement it, this guide will provide you with all the information you need. So, let's begin!

Leave Travel Allowance (LTA) is a tax-free allowance provided by employers as part of their employees' salary component. It allows employees to claim tax exemption on the costs incurred for leisure travel within India. Under LTA, employees are permitted to take a leave from work and travel on vacation, with the costs incurred considered as a tax-free expense. The exemption is allowed twice in a block of four years, subject to certain conditions.

To avail of the LTA tax benefit, employees must submit the bills and travel documents to their employer as proof of travel expenses. The exemption is allowed only for the expenses incurred during the travel period and is subject to specific conditions.

To claim an exemption for LTA, employees must fulfill the following conditions:

The employee must actually travel to be eligible for LTA. Claiming LTA without actually traveling is not permitted.
The vacation should be taken only within India.
Costs incurred for family members who travel with the employee would also be allowed as an exemption. The family members include spouses, children, dependent parents, and dependent siblings.
LTA components must be included in the salary structure of the employee.
The exemption can be claimed for up to two children born on or after 1st October 1998. There is no restriction for children born before this date or in cases of multiple births on a second occasion after having one child.
LTA exemption is allowed for up to two journeys taken within a block of four calendar years. The current block year for claiming LTA started in 2022 and will end in 2025. Unused LTA entitlement for the current block year is forfeited if not claimed, and the employee will need to wait for the next block year to claim LTA again.
LTA can be claimed for travel by any mode of transport, including air, train, or road.
No LTA is allowed for hotel accommodation and food.

The eligibility for LTA exemption depends on the actual cost incurred on travel. Employees can claim LTA exemption for the expense incurred on booking a journey from their place of origin to the place of travel and back. The journey should be undertaken through the shortest possible route by air, rail, or bus. Only the cost of tickets booked for travel is allowed as an exemption. Costs incurred on conveyance, sightseeing, accommodation, shopping, and food are not allowed. If the employer offers a lower LTA allowance than the actual travel cost, the exemption is limited to the LTA allowed by the employer.

For example, if the employer allows an LTA of INR 25,000 and the employee incurs travel costs of INR 35,000, the LTA exemption can be claimed only for INR 25,000. Conversely, if the employee incurs a cost of INR 20,000, the exemption allowed would be INR 20,000.

The quantum of LTA exemption depends on the actual cost incurred on travel. The LTA exemption is allowed for the expense incurred on booking a journey from the employee's place of origin to the place of travel and back, through the shortest possible route via air, rail, or bus. Only the cost of tickets booked for travel is allowed as an exemption. Costs incurred on conveyance, sightseeing, accommodation, shopping, and food are not allowed.

The actual travel costs incurred for LTA exemption depend on the mode of transport. The rules for determining the exempted travel costs for various modes of transport are as follows:

When the destination is not connected directly by a recognized public transport, the exempted travel costs are considered to be the fare of AC first-class rail tickets from the origin city to the destination city, assuming the journey is made by rail and the shortest route is taken.
If the destination is connected by all recognized public transport other than trains, the exempted cost would be the fare of first class or deluxe class on such transport for the journey taken using the shortest route.
If the destination is connected by trains, the exempted cost would be the fare of an AC first-class train ticket for the shortest route, whether the journey has been taken by train or not.
If the employee travels by air, the exempted cost would be the fare for economy class of a national carrier using the shortest route.

LTA exemption is available for two journeys undertaken in a block of four years. However, if an employee does not take two journeys within the four-year block, only one unutilized LTA can be carried forward to the next block of years and claimed therein. To claim the unutilized LTA, the employee must take a trip in the first calendar year of the next block. If the unutilized LTA is not claimed within the first year of the next block, it will expire and cannot be claimed later on.

Even if an employee changes their job within a block of four years, LTA exemption is still available. If the change happens within the block and there is any unutilized LTA, it can be claimed with the new employer. However, if the LTA has been availed from the old employer, the new employer will not allow any new LTC.

If an employee goes on vacation and visits multiple cities, the exempted LTA amount will cover the cost of round-trip travel from their home city to the farthest city they visit and back. In other words, the LTA will reimburse the employee for the most expensive leg of their travel.

For example, if an employee resides in Delhi and decides to go on vacation to Mumbai, Kolkata, and Chennai, the cost of round-trip travel from Delhi to Mumbai is ₹5000, from Delhi to Kolkata is ₹4000, and from Delhi to Chennai is ₹6000. In this scenario, the exempted LTA amount would be ₹6000, which is the cost of the round-trip travel from Delhi to Chennai and back. Even though the employee visited multiple cities, the LTA will cover the expense of the farthest city visited and the return journey.

Under the Income Tax Act, LTA is allowed only when the employee takes a leave from work and then travels on vacation. If the traveling is done on holidays, the same is not allowed for LTA exemption. However, organizational practices might differ, and some companies may allow LTA exemption even if the trip is taken on a holiday, while others may not.

Under the Indian Income Tax Act, the following expenses can be included under LTA:

Travel expenses: LTA covers the cost of travel for the employee and their immediate family members, including spouse, children, and dependent parents or siblings. The travel can be undertaken by air, rail, or public transportation as per the specific rules defined by the employer or the Income Tax Department.
Destination: LTA is meant for travel within India. Employees can claim expenses incurred on traveling to any place in India for their leave period.
Mode of travel: LTA covers expenses incurred on travel by air, train, or other public transportation. The expenses are eligible for reimbursement based on the actual amount spent or as per the limits set by the employer or tax authorities.
Leave period: LTA can be claimed for travel during the employee's leave period, which may include annual leave, casual leave, or any other form of approved leave.

The procedure to claim LTA may vary depending on the employer's policies and procedures, but here are the general steps that most employees need to follow:

Check your eligibility: Ensure that you are eligible for LTA and have completed the required years of service with your employer. Check the LTA rules and regulations specific to your employer.
Plan your travel: Plan your travel in advance and select the mode of transport you wish to use. Keep all the relevant documents related to your travel, such as tickets, boarding passes, and invoices.
Apply for LTA: Fill out the LTA application form provided by your employer and provide all the relevant details of your travel, such as the date of travel, destination, mode of transport, and cost incurred.
Submit proof of travel: Along with your application form, submit all the relevant documents such as tickets, boarding passes, and invoices that prove your travel. These documents serve as proof of your LTA claim.
Await approval and reimbursement: Your employer will verify your LTA claim and, once approved, reimburse the amount claimed as per their policy. The reimbursement may be processed as part of your regular salary or as a separate payment.

Q: If the employee takes one journey in the block of 2022-23, by when should the unclaimed LTC be claimed in the next block?

A: The unclaimed LTC exemption should be claimed within the year 2025 if it is carried forward to the next block.

Q: Is LTA exemption available in the new tax regime applicable from the financial year 2022-23?

A: No, LTA exemption would not be allowed under the new tax regime, which is applicable from the financial year 2022-23.

Q: If the employee's parents-in-law travel with him, would the travel costs for the parents-in-law be claimed as an exemption?

A: No, LTA exemption cannot be claimed for travel costs of parents-in-law.

Q: Which section of the Income Tax Act allows an exemption for LTA?

A: Section 10(5) of the Income Tax Act, 1961 allows LTA exemption.

Q: If the boarding pass is lost, can LTA be claimed?

A: LTA can be claimed if the boarding pass is lost. However, allowing LTA exemption would depend on the employer and the availability of other proofs.

Q: If the employee's wife travels with him, would her travel costs be allowed as an exemption?

A: Yes, the travel costs of spouses can be claimed under LTC exemption.

Q: Can only the travel costs of the family members be claimed as LTA if the employee does not travel?

A: No, if the employee does not travel, no LTA exemption would be allowed even if the family members travel.

Q: What would happen if the employee did not travel in a block of four years?

A: If the employee does not travel in a block of four years, LTA exemption would not be allowed. However, one unutilized LTA can be carried forward to the next block.

Q: Can return airfares on international trips be claimed under LTA?

A: No, international travel is not covered under LTA, and return fares on such travel would not be allowed as an exemption.

Q: Can I claim LTA exemption twice in one financial year?

A: No, only one LTC exemption can be claimed in one financial year. If you have taken two trips within the same financial year, the exemption would be allowed only on one trip.

Leave Travel Allowance (LTA) is a valuable tax benefit that allows employees in India to save taxes on travel expenses incurred during their vacations. By understanding the rules and regulations surrounding LTA, employees can make the most of this tax-saving measure. Employers, on the other hand, should ensure that LTA is properly implemented and administered to benefit their employees. With the comprehensive information provided in this guide, both employees and employers can navigate the world of LTA exemption with confidence.

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What is leave travel allowance (lta).

Leave Travel Allowance (LTA) is an allowance provided by employers to employees to cover their travel expenses incurred during leave periods for vacation purposes.

How does the exemption for Leave Travel Allowance (LTA) work?

Under the Income Tax Act, employees can claim tax exemption on the amount received as Leave Travel Allowance (LTA) for travel expenses incurred for themselves and their family members, subject to certain conditions.

What are the conditions to claim LTA exemption?

To claim LTA exemption, the travel must be undertaken within India, the employee must be on leave, and the travel expenses must be incurred on transportation (air, rail, or bus fares) to the destination and back.

Can LTA exemption be claimed for international travel?

No, LTA exemption is only applicable for travel undertaken within India. Expenses incurred for international travel are not eligible for LTA exemption.

Is there a limit to the LTA exemption that can be claimed?

Yes, LTA exemption is limited to the actual travel expenses incurred by the employee for himself/herself and eligible family members on the journey. The exemption is subject to the rules and limits specified by the employer's policy and the Income Tax Act.

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How to claim lta from your employer.

Before availing of the tax benefit on LTA, there are, however, certain other important conditions attached to it. Read on to know them. Do keep in mind that tax exemption on LTA can be claimed in the old tax regime only for FY 2021-22.

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LTA Full Form with Claiming Process

Lta full form.

LTA full form is Leave Travel Allowance. It is a provision by many employers to their employees, allowing them to travel during leave periods and claim expenses incurred during such travels. LTA is a component of the salary package and is often subject to specific terms and conditions outlined by the employer or the tax authorities. It aims to encourage employees to take vacations and explore different destinations. LTA can be claimed for travel expenses within India and sometimes even for international travel, depending on the employer’s policies and regulations.

Eligibility Criteria to Claim LTA

You must be an employee who receives LTA from your employer.
The travel must be within India.
You can claim the exemption for two journeys in a block of four years. The current block is 2022-2025.
You can travel with your family, which includes your spouse, children (up to two children born after October 1, 1998), and dependent parents, brothers, and sisters.

LTA Exemption

The exemption amount is based on your travel expenses and your employer’s LTA policy.
It generally covers the cost of economy airfare, train fare, or bus fare.
It does not cover expenses like food, accommodation, or local travel.

How to Claim LTA?

To claim Leave Travel Allowance (LTA) in India, employees typically need to follow certain steps and provide necessary documentation to their employer. Here’s a guide on how to claim LTA with an example:

Step 1: Understand LTA Policy: Familiarize yourself with your employer’s LTA policy, including eligibility criteria, frequency of entitlement, eligible family members, travel destinations, and documentation requirements.
Step 2: Plan Your Trip: Plan your vacation trip within India and decide on the mode of transportation, travel dates, destinations, and accommodation arrangements for yourself and your eligible family members.
Step 3: Keep Records of Travel Expenses: Keep detailed records of all travel expenses incurred during the trip, including transportation costs (airfare, train fare, bus fare, taxi fare), accommodation expenses, and food expenses.
Step 4: Collect Supporting Documents: Gather supporting documents such as tickets, boarding passes, hotel bills, restaurant bills, and any other relevant receipts or invoices as proof of travel expenses.
Step 5: Submit LTA Claim Form: Obtain the LTA claim form from your employer’s HR department or download it from the company’s employee portal then Fill out the LTA claim form accurately, providing details of your trip, travel expenses, and eligible family members.
Step 6: Attach Supporting Documents: Attach copies of supporting documents, including tickets, bills, and receipts, to the LTA claim form as evidence of incurred expenses.
Step 7: Submit Claim to HR Department: Submit the completed LTA claim form along with supporting documents to the HR department or designated personnel within your organization.
Step 8: Await Processing and Reimbursement: Allow time for the HR department to process your LTA claim. Once processed, you will receive reimbursement for the eligible LTA amount through your salary or as a separate payment, depending on your employer’s policies.

Example: Let’s consider an example:

An employee, Ravi, plans a vacation trip to Kerala with his spouse and two children during the summer holidays.
Ravi books air tickets, hotel accommodation, and incurs food expenses during the trip.
After returning from the trip, Ravi fills out the LTA claim form provided by his employer and attaches copies of tickets, hotel bills, and restaurant receipts as supporting documents.
Ravi submits the completed LTA claim form and supporting documents to the HR department for processing.
Upon verification, the HR department processes Ravi’s LTA claim and reimburses him for the eligible LTA amount as per the company’s policy.

LTA Calculation Example

Let’s consider an example to illustrate how to calculate Leave Travel Allowance (LTA):

Scenario: An employee, let’s call him Ravi, is planning a vacation trip with his family within India. Ravi’s employer offers an LTA benefit equal to the actual amount spent on travel expenses or a fixed LTA amount specified in his salary package, whichever is lower. Ravi’s LTA entitlement is Rs. 40,000 per year, and he is eligible to claim LTA once every four years.

Travel Details:

Mode of Transportation: Air Travel (Economy Class)
Travel Route: From Delhi to Goa and back
Travel Dates: Departure on 1st July 2024, Return on 7th July 2024
Family Members: Ravi, his spouse, and two children

Expense Breakdown:

Rs. 12,000 per person x 4 = Rs. 48,000
Total Airfare: Rs. 48,000
Rs. 5,000 per night x 6 nights = Rs. 30,000
Estimated food expenses for 6 days: Rs. 15,000

Total Actual Expenses:

Total Accommodation: Rs. 30,000
Total Food Expenses: Rs. 15,000
Total Actual Expenses: Rs. 48,000 (Airfare) + Rs. 30,000 (Accommodation) + Rs. 15,000 (Food) = Rs. 93,000

Calculation of Eligible LTA Amount:

LTA Entitlement: Rs. 40,000 (Maximum allowable LTA as per Ravi’s salary package)
Actual Expenses: Rs. 93,000

Since the actual expenses exceed Ravi’s LTA entitlement, the LTA amount eligible for exemption will be limited to his LTA entitlement of Rs. 40,000.

Conclusion: In this example, Ravi’s LTA entitlement is Rs. 40,000 per year, but his actual travel expenses amount to Rs. 93,000. As per his employer’s LTA policy, Ravi can only claim Rs. 40,000 as exempt from taxation, and the remaining Rs. 53,000 will be taxable as per the applicable income tax slab rates.

Frequently Asked Questions

1. what is lta in salary.

LTA stands for Leave Travel Allowance. It’s a component of your salary package provided by some employers to cover travel expenses when you take leave for vacation. LTA can typically be claimed for travel expenses within India, subject to certain conditions and limitations set by the employer and tax regulations.

2. How much is the LTA allowance?

The Leave Travel Allowance (LTA) amount varies based on your employer’s policy. Typically, it covers travel expenses for leave days granted by the employer. The specific amount depends on factors like your company’s policies, your designation, and the distance you plan to travel. Check with your HR department for precise details.

3. What is the rule for LTA claim?

The rule for LTA (Leave Travel Allowance) claim varies depending on your country’s tax laws and your employer’s policies. Generally, it allows employees to claim expenses incurred during travel within the country. Keep receipts and ensure your travel meets the criteria set by your employer and tax authorities.

4. Is LTA mandatory in salary?

No, LTA (Leave Travel Allowance) is not mandatory in salary. It’s an additional benefit provided by some employers to cover travel expenses when an employee takes leave. Whether it’s included depends on the employer’s policies and the terms negotiated in the employment contract.

5. What percentage of CTC is LTA?

LTA (Leave Travel Allowance) typically constitutes about 10-15% of an individual’s Cost to Company (CTC). However, this can vary depending on the employer’s policies and the specific terms negotiated in the employment contract. It’s advisable to consult your company’s HR department for precise information regarding your CTC breakdown.

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Leave Travel Allowance: All you need to know about LTA

Only salaried taxpayers can avail the benefit of lta and that too those who do not opt for new tax regime where lower tax rates are provided..

New Delhi : Though we are locked down presently and any travel is not possible but many of us must be craving to travel to kill boredom caused due to this lockdown, as soon as the situation normalises. The government of India too wants you to travel and promotes inland tourism. The tax laws provide for tax exemption in respect of leave travel allowance (LTA) received by salaried taxpayers from their employers subject to fulfillment of certain conditions. Let us discuss the tax benefits available for LTA.

Who can avail these benefits

Only salaried taxpayers can avail the benefit of LTA and that too those who do not opt for new tax regime where lower tax rates are provided. So the benefit of LTA can be claimed only if you opt for the old tax regime. Since the LTA can only be received by salaried taxpayers, tax benefit of LTA obviously cannot be availed by a self-employed person.

LTA has to be a component of your salary to be eligible for this tax benefit so even if you are a salaried individual but do not receive any LTA from your employer, this benefit will not be available to you.

Conditions for availing LTA benefits

LTA benefit can be claimed by you when you are proceeding to any place in India either on holidays or on your retirement/termination. Retirement for this purpose not only includes the mandatory retirement on reaching the age of superannuation but also includes one leaving employment to take up another employment. In case of retirement for taking another job, you ma have received LTA from your old employer or from new employer.

For whom you can claim LTA

You can claim LTA for yourself along with your family. However, if your family travels without you, this benefit is not available. Additionally, you should be on leave on the days of travel to claim the LTA benefits. You cannot claim benefits of LTA for your family if you take them along with you while going for your official trip. This is because you are not on leave at that time. Family for this purpose includes your spouse, and two children, whether dependent on you or not. It also includes your parents, brothers and sisters who are wholly or mainly dependent on you.

How frequently can you claim LTA

You can claim LTA exemption twice in a block of four calendar years. This block is not calculated with reference to the commencement of your employment but is predefined by the law. The current block has begun from January 1, 2018, and will end on December 31, 2021. The next block will be from January 1, 2022 to December 31, 2025 and so on. It is not necessary for you to claim LTA exemption in alternate years, what is required is that you cannot claim it for more than two journeys during the defined block of four years.

In case you and your spouse, both are working, your family can travel every year and claim the tax benefit of LTA every year for two different calendar years for each one of you. However, it is not logical that both of you cannot claim this exemption for the same journey.

What if you are not able to claim your LTA benefit for one or both the journeys during any block of four years? Do not worry, it does not get lapsed. The same can be carried forward and claimed during the first year of the next block of four years without affecting your right to claim two LTA exemptions for the next block during the same block.

What can be claimed under LTA

The LTA is available only for expenses incurred by you for travel to any place in India. So any expenditure incurred for travelling outside India is not eligible for tax exemption. Likewise, any expenditure incurred by you on local travel or hotel accommodation is not eligible for LTA exemption.

In case you are going on a foreign trip, you can claim the expense of travel from your place to the point of departure from India for undertaking foreign travel and back.

The exemption is restricted to actual expenses incurred by you in undertaking the journey from the starting point to farthest destination. However, there is a cap on maximum amount you can claim in respect of LTA exemption. The restrictions are dependent on the mode of transport. For travel by air, the exemption is restricted to the fare charged by Air India.

For railway journey, you are allowed fare of air-conditioned first class. If there is no such recognised public transport system operating on that route, you can claim a fare equivalent to air-conditioned first-class fare for the distance between your place to the destination by shortest rail route. The exemption is available for the farthest place by shortest route when a circular journey is undertaken.

Do you need to preserve proof of your travel?

You need to preserve the tickets to claim this income-tax benefit. If you hire a car, the receipt/ invoice from the travel agency or car rental agency is considered valid proof. Though your employer is required to verify the documents for granting you the exemption, you are under an obligation to produce it before the assessing office at the time of your income-tax assessment in case the case gets selected for detailed scrutiny.

Balwant Jain is a guest contributor. Views expressed are personal.

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Leave Travel Allowance (LTA)

What is lta.

LTA or Leave Travel Allowance, is a tax exemption for an allowance paid to the employee by the employer for travel expenses, while he or she is traveling on a leave.

Leave travel allowance can act as a tool for employees to save on taxes while taking leaves for traveling across India. Section 10(5) of the Income Tax Act, 1961, along with Rule 2B, provides tax exemptions and outlines the conditions for such exemptions. However, individuals opting for the New tax slab are not eligible for leave travel allowance.

An employee needs to plan their travel according to the purpose of claiming LTA exemption successfully. The income tax department of India has listed some rules and regulations regarding claiming exemptions under LTA.

Eligibility Criteria for Claiming LTA

The eligibility criteria for claiming LTA or leave travel allowance are as follows.

1. Legitimate evidence: Employees have to provide real pieces of evidence of their travel expenses to claim the LTA. It allows all modes of travel including land, train, and air. Only legitimate cost of travel is permitted for reimbursement. 2. Only travel costs: Other costs during traveling such as food, lodging, activities, etc are not covered under LTA. 3. Only domestic travel: Leave travel allowance only covers domestic travel across India. Employees cannot claim LTA for overseas (foreign trips) travel. 4. Twice in 4 years: The Government of India allows employees to claim LTA only twice in a block of 4 years. They cannot apply for LTA every fiscal year.

How to Claim Leave Travel Allowance (LTA)?

The process for claiming leave travel allowance differs according to the company. Employers commonly announce a due date for employees to claim for LTA. It is important to go through the LTA policy of the organization for a detailed claiming process.

In general, it contains these 3 basic steps:

Filling out the LTA form provided by the employer.
Submitting proof of travel details (documents).
Waiting for approval and reimbursement.

Documents Required for Claiming LTA

Employees might have to submit proof of travel records such as

Boarding passes
Receipts from travel agencies, etc.

Although in many cases, employers do not ask for the above-mentioned proof of records, it is advisable for employees to retain these documents.

LTA Rules for Exemption

1. employees can travel to any place in india..

Traveling to any destination across India is allowed under LTA. If the destination is not directly connected by recognized public transport, it will be assumed that the journey is made using the Indian railway using the shortest route. The exempted travel costs will be based on the fare of AC first-class rail tickets from the origin city to the destination city.

2. No international trips are considered.

In a case where the employee is taking an international or foreign trip, he/she/they is not eligible for an exemption.

3. There should be an actual journey to be eligible for claiming the exemption.

An employee cannot claim an exemption without traveling. The employer may ask for proof of travel records such as tickets, boarding passes, or receipts from the travel agent.

4. Food or stay or any other expenses are not considered.

Only the travel cost is exempted under LTA. Other expenses such as food, lodging, vacation activities, and sightseeing are not covered under LTA.

5. LTA can be claimed only for two journeys in a block of four years.

A block year is predetermined by the Government of India for employees to claim LTA. The first block year began in 1986 and is for a period of 4 years. The latest block year for claiming LTA is 2018-2021. Employees can claim exemption on travel expenses twice in one block of 4 years.

6. The family of the employee can also claim an exemption.

Employees can claim for exemption of travel expenses if any family member such as a spouse, children, dependent parents, brother, or sister takes a journey with or without them.

Unclaimed LTA – Carry Forward

In a case where an employee does not claim the leave travel allowance within the 4 years block, one of the 2 unused LTA is applicable to be carried forward to the next 4-year block. The employee can then use 3 LTAs in that block of 4 years.

To be eligible for the unutilized Leave Travel Allowance (LTA), the employee must undertake a trip during the first calendar year of the subsequent block. If the unclaimed LTA is not utilized within the initial year of the following block, it will expire and cannot be claimed at a later time.

What expenses can be included under LTA?

Leave Travel Allowance can be claimed only on the travel expenses incurred by an employee during a trip. It cannot be claimed for other expenses during the trip such as food, lodging, vacation activities, sightseeing, local conveyance, etc.

Calculation of Leave Travel Allowance

Calculating leave travel allowance includes evaluating the income from the salaries of employees. The LTA is exempted to a certain limit, beyond that, the rest of the amount is taxable under the general income tax slab.

For example, imagine an employee receiving an LTA of ₹10,000. If the travel expense incurred by him is ₹8,000, he is only allowed to claim an exemption for ₹8,000. The balance amount of ₹2,000 will be included in his taxable salary income.

5 Benefits of Leave Travel Allowance

1. Tax Saving: LTA allows employees in India to save on income tax by claiming exemption on travel fares or benefits for journeys taken within the country. 2. Family Coverage: LTA extends to the travel expenses of immediate family members, including spouses, siblings, parents, and children, provided they travel together with the employee. 3. Customization by Employers: Employers have the flexibility to determine the LTA amount. It is based on factors like pay scale, job responsibilities, and job title, allowing for customization in an employee’s salary structure. 4. Employee Motivation: Including LTA as part of the salary package can serve as an additional incentive for employees, boosting their overall job satisfaction and motivation. 5 . Domestic Tourism Promotion: LTA encourages employees to explore various destinations within India. This promotes domestic tourism and contributes to the growth of the country’s tourism industry.

Frequently Asked Questions (FAQs)

Q. who is eligible for lta.

Any salaried employee in India working under a registered company is eligible for LTA. The LTA can be claimed only on travel costs incurred by the employee. The travel expense claimed under LTA is only allowed on domestic travel. The LTA can only be requested if the employee has taken time off from work specifically for traveling.

Q. Can I claim LTA without traveling?

No, Leave Travel Allowance cannot be claimed without traveling. LTA is a benefit provided to employees to cover their travel expenses when they take leave for the purpose of travel. To claim LTA, you must have undertaken the travel and provide relevant proof such as tickets or travel receipts.

Q. What happens if LTA is not claimed?

Under the carry-over concession rules, if an employee has not claimed LTA in the previous block or has claimed it only once, they can still claim an additional LTA in the next block of calendar years. This allows the employee to avail of LTA tax breaks for up to three journeys in the current block of years.

Q. How many leaves are required to claim LTA?

The minimum number of leaves required to avail of the Leave Travel Allowance (LTA) exemption is not specified in the Income-tax Act. However, it is advisable to inquire with your employer as they may have their own requirement regarding the number of leaves needed to claim the exemption.

Q. Can I claim LTA in ITR?

Yes, you can claim LTA in your ITR. LTA is a tax benefit for travel expenses within India provided by employers. Keep necessary documentation and receipts for support. Ensure you meet the specific conditions and limitations set by your employer. Consult a tax professional or refer to the latest guidelines for accurate filing.

Q. Is Leave Travel Allowance only for Domestic Travel?

Yes, Leave Travel Allowance can be exempted only for domestic travel across India. It does not allow tax exemptions for foreign trips or overseas travel. It can be claimed for travel to any destination within India by means of road, rail, or air. The purpose of LTA is to encourage employees to take vacations and explore different parts of the country.

Q. How much is LTA in salary?

LTA deductions are applicable only for the shortest tour journey, including the place of departure and return. For instance, if a salaried employee receives ₹50,000, they can claim only ₹30,000. The remaining ₹20,000 will be treated as taxable income based on the applicable tax slab rates.

Q. What is the maximum limit in LTA?

The maximum limit for LTA (Leave Travel Allowance) is determined by the employer and may vary. However, there is a caveat that the exemption is limited to the lowest of the following three amounts:

The actual travel expenses incurred by the employee for the trip.
The amount specified by the employer in the LTA policy.
The amount is equivalent to the economy-class airfare of the national carrier (in case of air travel) or the first-class AC train fare (in case of rail travel) for the shortest route to the destination.

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What is Leave Travel Allowance and how to claim LTA exemption while filing returns

It should be noted that the allowed expenses of travel under LTA are subject to terms and conditions.

Leave Travel Allowance (LTA) can be beneficial in lowering your tax liability. LTA refers to the allowance given to an employee for personal outstation travel. It can be claimed only in case of travelling within India and not for foreign travel. In a block of four calendar years, LTA exemption is available for two journeys, and the current block is from 2018 to 2021 as people could not travel during the COVID pandemic. The LTA exemption is given to the employee and his/her family, including children, spouse, siblings, and dependent parents. For people born after 1998, the LTA can be claimed for a maximum of two children. It should be noted that the salary structure offered by the employer determines the LTA. It may not be available if this benefit hasn’t been extended to you by your employer.

How to claim LTA?

In a multi-destination journey, there is an exemption for the travel cost from the origin place to the farthest place in the journey through the shortest route. If an employee has not availed exemption within the block of four years in any year with respect to one or two journeys, then he/she can carry the exemption to the next block. The benefit can be availed in the succeeding block’s first calendar year.

If you are thinking of claiming the LTA benefit, make sure to keep the travel agent’s invoice, travel tickets, and other travel proof with yourself as you may require them if your employer asks for documentation. The benefits of LTA are only available for travel expenses, and not the expenses of food and stay. The allowed travel expenses under LTA are subject to terms and conditions.

Note that it is essential to be on leave during the time one is claiming LTA. You should prefer claiming LTA benefits for a journey where higher actual expenses were incurred. For instance, imagine that you avail LTA for a trip in which a much lower cost was incurred in comparison to the travel expense permitted according to the I-T Act and the specified LTA threshold in your CTC. In this scenario, you will exhaust your LTA option for a meager tax-saving benefit.

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All you need to know about Leave Travel Allowance (LTA)

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. 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. LTA is exempt from taxes under the income tax act. In this article, we have tried to explain some interesting and relevant aspects about Leave Travel Allowance which you as a salaried employee must keep in mind.

Meaning of Leave Travel Allowance (LTA)

Leave travel allowance means the allowance provided by the employer to its employee for travelling on leave. It is a component of cost to company which is exempted from taxation under Income Tax Act, 1961, subject to certain terms and conditions.

Advantages of Leave Travel Allowance

Leave Travel Allowance (LTA) is one of the important components of the salary structure that helps in saving income tax.
LTA can be claimed for travel fare or tickets within India only, expenses incurred for accommodation, or any other fee will not be eligible for exemption.
An employee can produce his/her travel-related bills for the journey through air, train, bus or any other mode of transport and save on taxable income.
LTA is added to the salary structure by the employer based on various factors such as title, position, pay scale, etc.

The LTA benefits can be availed only if it is a part of the salary structure. You can claim for the LTA when you have travelled alone or when with family as well. LTA covers the travel expenses for family members – parents, siblings, spouse, and children as well, provided you have travelled with them on those occasions.

Conditions for claiming Leave Travel Allowance

Following are the condition for claiming the LTA:

Exemption must be available on actual journey only.
Also, only domestic travel (travel within India) is considered while claiming exemption while international trip or travel is not eligible for claiming exemption.
This exemption is available to the employee or with his family.

Here, family includes spouse, children and wholly or mainly dependent parents, brothers or sisters of the employee. Also only 2 children will be considered for claiming this exemption, however if twins or multiple children are born on second occasion then the exemption will be available for total children born on first and second occasion.

Calculation and Maximum Limit of LTA

According to the provisions of the income tax act no monetary limits either as percentage or absolute amount exist, in respect to LTA. Thus, the employer can freely decide what component of salary he wants to allow his employee to claim as LTA. However, prudence demands that the amount of LTA should be reasonable in relation to the overall salary of the employee.

Eligible exemption

Exemption is only available on actual travel cost i.e, fare paid by the employee, no exemption is available for local travel, sightseeing, accommodation, food etc. Also exemption is limited to LTA provided by the employer only.

Exemption available for various modes of transport

Note : Exemption is available for only 2 journeys travelled in a block of 4 calendar years, current block is 2018-21. If exemption is not availed during the respective block for one or two journey, then the same could be carry forwarded and could be claimed in the first calendar year of immediately succeeding block. Also in case of multi destination journey exemption is available for the eligible travel cost from place of origin to the farthest place in vacation by the shortest route.

LTA Cash Voucher Scheme

As of now it is impossible for anyone to travel due to strict COVID guidelines therefore to help with this government launched the “ Cash Voucher Scheme ” to benefit public and private sector employees.

The various criteria for the scheme are:

The exemption is available for F.Y. 2020-21
This scheme shall count as usage of 1 trip out of the 2 journey during the block of 4 calendar years.
The employee and his family have to incur specified expenditure on purchase of goods and services having GST rate of 12% or more.
The above purchases should be made between 12 Oct 2020- 31 March 2021
The expenditure should not exceed Rs. 36000 or 1/3 rd of the specified expenditure, whichever is lower.
The payment for such expenditure should be made via digital or electronic mode only.
Where you don’t avail of the scheme there either you can carry forward the amount to next year or pay it to you after deducting TDS on it.

Note . This scheme will be available to the employee opting for old tax regime only.

Documents required for claiming LTA

To claim for LTA, an employee is required to submit the LTA form along with the travel bills. Though the IT Department or the employer are not required to check the tickets or bills, it is recommended to preserve the tickets, boarding pass, and other documents, so it can be provided to the LTA claim assessing officer if required.

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Choosing New Tax Regime in FY25? Here are the deductions that are allowed under new structure

It should be noted that the adoption of new tax regime comes with certain restrictions. like, exemption claims associated with specific deductions, including house rent allowance(hra), leave travel allowance (lta), sections 80c, 80d, etc, will remain inaccessible..

Updated Mar 30, 2024, 12:56 PM IST

The income tax slabs and income tax rates will remain unchanged in the upcoming financial year 2024-25, starting from April 1, 2024.

The Government introduced a New Tax Regime, under Section 115BAC, as an optional alternative to the pre-existing Old Tax Regime. Enforced from April 1, 2020 (FY 2020-21), it was initially aimed at individuals and Hindu Undivided Families (HUF). After operating for three years in this manner, Union Finance Minister Nirmala Sitharaman announced during the Union Budget 2023 that going forward, this New Tax Regime would become the default tax system for those taxpayers who do not express any preference at the commencement of the new fiscal year (FY2025).

Constructed with revised tax slabs and concessional tax rates, it applies uniformly to all categories of taxpayers inclusive of individuals, HUFs and Association Of Persons (AOPs).

Furthermore, during her budget speech for the financial year 2023-24, Sitharaman stated that policy proposals falling under the new income taxation regime have been structured such that they leave more disposable capital with the taxpayers.

The decision on how best to utilise their money is no longer influenced by governmental incentives or disincentives but remains solely the discretion of each taxpayer, the FM had said.

However, it should be noted that the adoption of this new taxing system comes with certain restrictions. Like, exemption claims associated with specific deductions including House Rent Allowance(HRA), Leave Travel Allowance(LTA), Sections 80C ,80D etc, will still remain inaccessible. These benefits were specifically designed for use within the context of the Old Tax Regime.

In Union Budget 2023, FM Sitharaman introduced 5 key changes to encourage taxpayers to adopt the New Tax Regime. It is to be noted that salaried individuals can claim two deductions under the new tax regime -- Standard Deduction and deduction under section 80CCD (2) for employer's contribution to NPS.

Here are the latest changes in the New Tax Regime:

1. Standard Deduction and Family Pension Deduction

In the case of salary income, the Standard Deduction of Rs 50,000, which was previously only available under the Old Tax Regime, was extended to the new tax regime. Under the New Tax Regime, you can enjoy a tax-free income of Rs 7.5 lakhs, which is after you apply the standard deduction and tax rebate.

Family pensioners can also benefit from this deduction. They can claim either Rs 15,000 or 1/3rd (33.33 per cent) of their pension, whichever is lower.

It is to be noted that the benefit of the Standard Deduction will be allowed to pensioners only if the pension is taxable as salary income. If someone chooses the pension as income from the other source, then the benefit of the Standard Deduction will not be applicable.

Documents required for standard deduction

No supporting documents are required to claim the Standard Deduction. But to file the IT return of a salaried individual, the following documents are required.

> Bank statements of the previous fiscal year.

> Income statements from interest or fixed deposits.

> TDS (Tax Deducted at Source) certificates.

> Investment documents.

> Form 26AS and Form 1040.

2. Deduction under Section 80CCD(2)

Section 80CCD(2) applies to only salaried individuals and not to self-employed individuals. The deductions under this section can be availed over and above those of Section 80CCD(1).

Section 80CCD(2) allows a salaried individual to claim the following deduction:

Central Government or State Government Employer: Up to 14 per cent of their salary (basic + DA)

Any other employer: Maximum deduction of 10 per cent of salary (basic + DA)

Under the updated tax regulations, individuals can avail the advantage of employer contributions to their National Pension System (NPS) account as per Section 80CCD(2) of the Income Tax Act. This deduction is limited to the employer's NPS contributions made on behalf of the employee, up to 10 per cent of the employee's salary (Basic + DA).

The new tax regime also offers exemptions for voluntary retirement, gratuity, and leave encashment.

3. New Tax Regime Exemption List (not exclusive)

> Transport Allowances w.r.t. Person with Disabilities (PwD)

> Conveyance Allowance

> Travel/ Tour/ Transfer Compensation

> Exemptions for Voluntary Retirement Scheme u/ Section 10(10C)

> Gratuity Amount u/ Section 10(10)

> Leave Encashment u/ Section 10(10AA)

> Deductions on Deposits in Agniveer Corpus Fund u/ Section 80CCH(2)

Tax slabs of New Tax Regime applicable for FY2024-25

Tax Slab Rates

Up to Rs. 3L NIL

Rs 3L to Rs 6L 5% on income which exceeds Rs 3,00,000

Rs 6L to Rs 9L Rs 15,000 + 10% on income more than Rs 6,00,000

Rs 9L to Rs 12L Rs 45,000 + 15% on income more than Rs 9,00,000

Rs 12L to Rs 15L Rs 90,000 + 20% on income more than Rs 12,00,000

Above Rs 15L Rs 150,000 + 30% on income more than Rs 15,00,000

Baltimore Port: What impact will bridge collapse have on shipping?

U.S. President Joe Biden visits the Port of Baltimore

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Current status of cargo ships inside port, cruise ships, london metal exchange warehouses, bunker fuel.

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Watch CBS News

How to travel around the Francis Scott Key Bridge collapse in Baltimore: A look at the traffic impact and alternate routes

By Rohan Mattu

Updated on: April 1, 2024 / 8:13 AM EDT / CBS Baltimore

BALTIMORE -- The collapse of the Francis Scott Key Bridge in Baltimore early on the morning of March 26 led to a major traffic impact for the region and cut off a major artery into and out of the port city.

Drivers are told to prepare for extra commuting time until further notice.

Locator map showing the typical traffic routes of cargo vessels passing beneath the bridge and the trajectory Dali followed before the collision.

Alternate routes after Francis Scott Key Bridge collapse

Maryland transit authorities quickly put detours in place for those traveling through Dundalk or the Curtis Bay/Hawkins Point side of the bridge. The estimated 31,000 who travel the bridge every day will need to find a new route for the foreseeable future.

The outer loop I-695 closure shifted to exit 1/Quarantine Road (past the Curtis Creek Drawbridge) to allow for enhanced local traffic access.

The inner loop of I-695 remains closed at MD 157 (Peninsula Expressway). Additionally, the ramp from MD 157 to the inner loop of I-695 will be closed.

Alternate routes are I-95 (Fort McHenry Tunnel) or I-895 (Baltimore Harbor Tunnel) for north/south routes.

Commercial vehicles carrying materials that are prohibited in the tunnel crossings, including recreation vehicles carrying propane, should plan on using I-695 (Baltimore Beltway) between Essex and Glen Burnie. This will add significant driving time.

Where is the Francis Scott Key Bridge?

The Key Bridge crosses the Patapsco River, a key waterway that along with the Port of Baltimore serves as a hub for East Coast shipping.

The bridge is the outermost of three toll crossings of Baltimore's Harbor and the final link in Interstate 695, known in the region as the Baltimore Beltway, which links Baltimore and Washington, D.C.

The bridge was built after the Baltimore Harbor Tunnel reached capacity and experienced heavy congestion almost daily, according to the MDTA.

Tractor-trailer inspections

Tractor-trailers that now have clearance to use the tunnels will need to be checked for hazardous materials, which are not permitted in tunnels, and that could further hold up traffic.

The MDTA says vehicles carrying bottled propane gas over 10 pounds per container (maximum of 10 containers), bulk gasoline, explosives, significant amounts of radioactive materials, and other hazardous materials are prohibited from using the Fort McHenry Tunnel (I-95) or the Baltimore Harbor Tunnel (I-895).

Any vehicles transporting hazardous materials should use the western section of I-695 around the tunnels, officials said.

Francis Scott Key Bridge
Bridge Collapse
Patapsco River

Rohan Mattu is a digital producer at CBS News Baltimore. Rohan graduated from Towson University in 2020 with a degree in journalism and previously wrote for WDVM-TV in Hagerstown. He maintains WJZ's website and social media, which includes breaking news in everything from politics to sports.

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Eligibility for Leave Travel Allowance (LTA)

LTA Exemption for Various Modes of Transportation

LTA for Multi-Destination Trips

Claiming LTA in case of a Job Change

Unclaimed LTA

LTA Exemption for Vacation on Holiday

Documents Required for Claiming LTA

Procedure to Claim LTA

FAQs about Leave Travel Allowance (LTA)

How many times can an employee claim Leave Travel Allowance?

Is international travel covered under Leave Travel Allowance?

Which section of the Income Tax Act allows an exemption for LTA?

If an employee’s parents-in-law travel with him, would the travel costs for the parents-in-law be claimed as an exemption?

Can only the travel costs of the family members be claimed as LTA if the employee does not travel?

What would happen if the employee did not travel in a block of four years?

Can I claim an LTA exemption twice in one financial year?

What is the latest block period to claim LTA exemption?

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