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.
- No need to submit proofs for LTA
- Income Tax Guidelines & Mini Ready Reckoner 2012-13 And 2013-14
- Leave Travel Allowance
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.
- 2002 – 2005
- 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.
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.