What is Leave Travel Allowance (LTA)?

July 20, 2011

Income Tax

Many of us aware that Leave Travel Allowance(LTA) can be used in the tax exemption. I found it confusing for many people when deciding the eligibility to apply for the LTA. Most of them are not aware of the rules and policies related to the LTA. In this article I will explain the restrictions associated with applying the LTA and who can apply for it?. I hope this article will be useful for you. If you have any doubts please post it in the comments section. Please subscribe to our future articles here.

What is Leave Travel Allowance (LTA)?

LTA is given for the salaried people for any travel they have spent money and it can be tax exempt. This is allowed only for the salaried people. Every four years you can claim the LTA two times. There are lot of restrictions around claiming the LTA. Please read the following sections.

Points to Remember on LTA

  • The amount you want to claim on LTA should be actually spent on travel. It could be of Air, Rail or Bus. Any other expenses like food,etc. can not be claimed as LTA.
  • LTA can be claimed only for your family. However, you must travel with your family to eligible for the LTA. Here family means, spouse and children (including adopted children and stepchildren). Parents, brothers and sisters are also included if they are dependent on you.
  • This travel should be with in India. If you travel outside India, you can not claim LTA.
  • You must submit the proof of the travel. In this case, it will be tickets of flights , rail or bus. If you are traveling taking the car for rental, you must submit the bills from the rental company. Please note that any non-transport component (like driver allowance) is not considered for income tax exemption.
  • You must note that the travel should be on the shortest distance to the destination. For example, if you are traveling to Mumbai, you must choose the shortest route to reach the destination to eligible for the claim. Also, the last route will be taken for the claim. If you are traveling by air, you must choose the economic class. If you are traveling by Train, the maximum allowed is first class (AC I Class).
  • Another most important point is that LTA can be claimed on the block of four years. That means you can claim two times in the specified block. This window is created by govt. These blocks of 4 years are predefined by the government. These are:
    • 2002 – 2005
      2006 – 2009
      2010 – 2013 And so on. The current block is 2010 – 2013. Please note that it is calendar years (January to December). Not that financial years.
  • You can not claim all the two LTA in the same year. For example, if you have traveled two times in the year 2010. You are eligible to claim only once. If your spouse also working, then she an claim another travel. There is an option to carry forward one travel to the next window. If you have utilized only one LTA in the current window, you can use three LTA claim in the next window. But, with restriction that you have to use it in the first year of the next block of 4 years.
  • If both are working in a family, same LTA can not be claimed by both. If you have traveled  two times in a year, then both of you can claim one LTA.
  • The maximum eligible amount for LTA is Rs.20000 for each journey. The remaining amount will be paid after the tax deducted. For example, if you have spend Rs.18000 on the journey, then you are eligible to claim only Rs.18000 as the LTA exemption. The remaining Rs.2000 will be taxable. In the same way, if you have spent more than Rs.20000, the maximum eligibility is Rs.20000.

Summary

The above are the important points to consider on Leave Travel Allowance (LTA). You must remember that it is only the tax exemption, not the reimbursement of the entire amount. Instead of paying taxes for that Rs.20000, you can claim tax benefits on the expenses. If you are interested in journeys and tours, it will be good or you to claim these benefits. If you have any questions, please post it in the comments section.

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21 Responses to “What is Leave Travel Allowance (LTA)?”

  1. Partho Says:

    Dear Krishna,

    1. Is it mandate to travel if I have a LTA
    2. Can rental cab can be considered for LTA claim.
    3. What if i don’t travel, hence I don’t claim. (can you explain more)
    if LTA eligibility is 15000/year
    -
    Partho

    Reply

  2. Bala Says:

    How to avoid TDS and what is form 15H&15G.

    Reply

  3. Raj Says:

    There is no limit of LTA exemption amount, which is written above Rs. 20000/ as per lTA rule. you can claim any amout if bills are presented.

    Reply

  4. krishnas Says:

    @Partho,

    1. If you want to use LTA then you must travel. Otherwise you will get LTA amount as the taxable income.
    2. Yes. You should submit the bills.
    3. Nothing will happen. The LTA amount would be taxable.

    @Bala,

    Read this article,
    http://www.thinkplaninvest.com/2009/08/what-you-should-know-about-form-15g-and-form-15h/

    @Raj,

    The maximum amount you can claim is Rs.20000.

    Thanks,
    Krishna

    Reply

    • Sonu Says:

      Is LTA applicable for those people who pay’s tax or jisko tax lagta hai..??
      If a women earns 1.80L or 2L p/a than is this LTA applicable to her..??

      Reply

  5. saurabh srivastava Says:

    I Have some doubts about the limitation of LTA. Is this a actual limitation of LTA. because i heard that limitation is depend on the company entitlment. according to you the limitation is Rs. 20000 means i can claim only for the Rs. 40,000/- in the 4 years. If you clarify this then i will be so thankful to you.

    Regards,
    Saurabh Kumar Srivastava

    Reply

  6. Gopi Says:

    Hi,

    I go to my native once in a month on weekends(onwards on friday and return on sunday). Can I use the bus/train tickets of this travel to claim LTA?

    Thanks,
    Gopi

    Reply

  7. shramit Says:

    I Joined my current employer in march’11. I dont have any leave travel document.

    How and when i can get the LTA amount as Taxable?
    Is LTA amount will directly credited in salary as taxable or for that also i need to claim to my employer?

    Reply

  8. Abhishek Says:

    Can one avail LTA benefit while on maternity leave / paternity leave / compassionate leave ?

    Reply

  9. jitendra Says:

    I need to how to claim transport allowance.
    Transport allowance reflects in my salary sheet.
    Any Form have to be submitted for claim of transport allowance

    Reply

  10. Viral Says:

    Can anyone suggest on this case :

    I worked in one company for 6 months where i was getting LTA amount.

    In next company, there is no LTA amount mentioned in Salary slip.

    But I travelled after joining in new company ( where there is no LTA), so can i claim LTA based on LTA paid from previous company

    Reply

  11. Preetesh Kumar Says:

    I’m eligible for LTA of 6000, if i don’t fall on taxable group can i claim LTA or not, does it get credited with Salary?

    Reply

  12. Bhavin Shah Says:

    If I am going on holiday through travel agents like thomas cook etc service then would I be eligible for tax deduction of whole Travelers charges(which includes stay in hotel, train travelling and food) or only that much which cost for train travelling?

    and in this case which are the proof I should have?

    Reply

  13. raj Says:

    Hi,
    I’m recently employed..
    My LTA is 36,000 P.A. Please clarify below doubts..

    1. Will the amount be refunded if not traveled at all.
    2. Can I use the LTA amount for tour with family or me alone.

    My Telephone/Internet allowances is 36,000 P.A
    Can it be refunded if not used…

    Reply

    • krishnas Says:

      Hello Raj,

      1. Yes. The LTA amount is only tax exempted. It means, if you utilize Rs. 36000 for LTA, the amount will be paid with salary without deducting any tax for that amount after you submit the travel bills. If you have not traveled, the amount will be paid with salary at the end of financial year after deducting the tax as with normal salary component.

      2. You, Your spouse and Kids can use that. But, you must be in the tour to claim the expenses.

      3. Your Telephone and Internet expenses can not be claimed.

      One clarification, the word refund is not correct usage. It is not a refund, it is reduction in the tax deduction. Call it as tax exemption. There was tax exemption for Fuel and Telephone bills few years back under the head of Fringe Benefits Tax (FBT). It was abolished by the current govt.

      Thanks,
      Krishna

      Reply

  14. Sriram Says:

    Hi Krishna,

    If I submit the travel bills as in tickets, say for example 15000. Will they credit the amount to my salary or what happens after i submit the claim?

    Thanks,
    Sriram

    Reply

  15. srinivas Says:

    Hi Krishna,

    Is there any particular clause for LTA Eligibility for employees (like any particular Designations or Particular Gross Wages)

    what is the maximum limit for LTA Clime

    What is the maximum amount employer can pay to the employee under LTA component?

    Srinivas B

    Reply

  16. Raj K Says:

    I am spending almost Rs 40000/- for bus fair on my wedding.
    As per my company its showing my eligibility as Rs 40000/- .

    Me and my whole family is travelling through the bus along with friends and relative.

    What are the possible ways to claim it.

    Raj K

    Reply

  17. krishnas Says:

    Hello Raj,

    You can not claim for your relatives or the bus fair for wedding. It is for your family (Spouse, Kids) to plan a tour. For wedding expenses you can not claim.

    Thanks,
    Krishna

    Reply

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