LTA should have a proper enforcement system beyond 2018. What's so hard to key in a driver's ID into a tablet to retrieve his PDVL status? LTA has even done away with road tax discs because officers can 'tag' your car plate to check for excise duties evasions, if any. The Lawn Tennis Association has declared its first operating profit for four years but warned of uncertain times ahead due to the impact of the coronavirus pandemic. The LTA’s finance and governance report for 2019 revealed a profit of GBP 8.7million, in contrast to a GBP 6.3m loss the previous year, albeit significantly bolstered by its.

Leave Travel Allowance (LTA) is an actual expense based allowance provided to an employee for travelling within India during the leave period.

It is also referred to as Leave Travel Concession (LTC).

Lta 4 Year Slot Bracket

This allowance can be in form of:

1. Reimbursement of Travel Expenses,
2. Concession in Ticket Price, or
3. Free Ticket

Travel allowance policy differs from one employer to another but the tax law provides a standard rule.

In this article, we will cover the taxation of LTA, its exemption limit and many more.

LTA- Leave Travel Allowance [u/s 10(5)]

A person can get the exemption of travel allowance received from:

1. Current Employer for travelling during the leave period, or
2. Former Employer after his retirement or termination

This allowance is limited to the actual expenditure incurred for self and family on travel within India.

For a person, an LTA exemption is available for the following family members:

1. His Spouse and children (including step and adopted), and
2. His Dependent parents, brother and sister

Further, there are various rules which need to fulfil while claiming this allowance.

LTA Rules and Exemption Limit [Rule 2B]

This allowance can be availed for 2 journeys (back and forth) in a block of 4 calendars* years.

LTA used from 1st April 2017 to 31^st March 2018 will be allowed as the deduction in the assessment year 2018-19 even if it falls under both current and next block periods.

*Calendar Year starts from January and ends in December.

Carry-over of Unused Leave Travel Allowance

If a person did not use travel allowance (LTA) once or twice during any of the specified 4 years block periods, he can still use 1 (one) unused allowance in the calendar year immediately following that block period.

In this case, the exemption so availed will not be counted for calculating 2 journeys for the next block of 4 calendar years.

Example:

Mr.Sonu, a central government employee, was entitled to avail 2 LTA during the calendar year 2014, 2015, 2016 and 2017 [Previous block of 4 yrs].

Suppose he fails to avail both LTA, then he can still use 1 (one) LTA in calendar 2018 i.e Jan 2018 to Dec 2018.

He can still have 2 additional LTA during the calendar year 2018, 2019, 2020 and 2021. [Current Block of 4 yrs]

LTA Exemption Limit and its Calculation

LTA exemption is allowed up to the actual travel fares.

The maximum travel fare which can be claimed as the exemption is given below:

Calculation of LTA:

Mr.Raman travels to Pune through Indigo Airlines:

Airfare paid for both way flights – Rs. 12,000/-

Airfare reimbursed by the Employer- Rs.10,000/-

Air Fare for the shortest Route- Rs.8,000/- [wild guess]

Calculate the exempted and taxable LTA.

Solution:

Exempted LTA: Rs.8,000/- [LTA exemption cannot exceed the economic Airfare for the shortest route]

Taxable LTA: Rs.2,000/- will be taxed as salary Income [10000-8000]

Note:

1. LTA exemption is also available to foreign employees.
2. Travel bill should be saved for future reference.
3. The employee should submit those travel bill along with form 12BB
4. LTA is only for travel expenses i.e food, sightseeing, hotel or any other expenses on travel are not eligible for exemption.
5. LTA can be claimed for a maximum 2 children if born on or after 01^st October 1998. In other words, LTA can be claimed for multiple children if they are born before 01-10-1998.
6. Childs born as twin or more shall be considered as 1 child if they are born after the birth of person’s 1^st
7. International travel is not eligible for LTA exemption.

Recommended to Read: 10 Popular Allowance for Salaried Person

Happy Learning!

FAQ’s for claiming Leave Travel Allowance (LTA) as per Income Tax Rules

LTA is the benefit given by the employer to employees. While employee would enjoy the trip, they would also get benefitted with income tax benefit received through LTA. What is Leave Travel Allowance (LTA)? What are the income tax rules pertaining to LTA? In this article I would detail about LTA and some of the frequently asked questions about LTA.

What is Leave Travel Allowance (LTA)?

LTA (Leave Travel Allowance), is a benefit provided by almost all employers to their employees which provide income tax benefit. One can claim LTA for two times in a block of 4 years. Employees would take leave, enjoy their travel and claim this as reimbursement where income tax is not deducted. However, there are certain Income Tax guidelines to be followed to claim LTA.

Also Read: How to check employee provide fund (EPF) online?

20 FAQ’s for claiming Leave Travel Allowance (LTA) as per Income Tax Rules

1) What is the amount that can be claimed for LTA?

LTA is a benefit provided by the employer. It could be any amount starting from Rs 20,000 and above. The amount would be decided by the employer based on the grade and seniority of the employee.

2) When an employee can claim LTA?

An employee can claim LTA for 2 years in a block of 4 block years. Means, they can claim first time in year-1 and year-2 and second time in year-3 and year-4.

3) What is a block year in LTA?

Income tax rules define block year for claiming LTA. Previously it was 2010-2013. Currently it is 2014-2017. Means you can claim first LTA in 2014 and 2015 and second LTA in 2016 and 2017.

4) How a year is defined by IT rules for claiming LTA?

For claiming LTA, it is a calendar year and not financial year. For e.g. 2015 means 1-Jan-2015 to 31-Dec-2015. 2016 means 1-Jan-2016 to 31-Dec-2016. So current block year (4 years) starts from 1-Jan-2014 and ends at 31-Dec-2017.

5) Which IT section exempts LTA amount?

LTA amount claimed as per IT rules is exempted u/s 10 (5) of Income Tax Act.

6) How many trips an employee is eligible to claim for claiming LTA?

The employee can claim LTA for only one trip in a year. One cannot claim multiple trips in a year to claim LTA.

7) If an employee does one trip, but visits multiple places, is he eligible to claim LTA?

Income tax rule indicates that LTA can be claimed for the shortest distance between the starting point and farthest point. In between, if there are more places to visit, you can do that.

Also Read: What are the smart ways to reduce your home loan interest and EMI?

8) Who is eligible to travel along with employee to get LTA benefit?

The employee can take his spouse, kids and dependant parents, dependent brother or sister as part of travel to claim LTA benefit. He cannot take his friends / girlfriend (J) to get LTA benefit.

9) How many kids are eligible to travel to get LTA benefit?

2 kids are eligible for travel to get LTA benefit. In case there is triplet kid, due to twins, such twins would be considered as one kid for this purpose.

10) Can I claim LTA by travelling abroad trip?

LTA can be claimed for travel taken within India. You cannot claim foreign trip expenses for LTA benefit.

11) What expenses can be claimed under LTA Benefit?

LTA can be claimed only for ticket cost from starting point to the destination point and vice versa. One cannot claim food expenses, lodging expenses and other miscellaneous expenses under LTA claim.

12) What mode of travel is eligible for claiming LTA?

Lta 4 Year Slot Value

• In case of air travel, economy class is eligible.
• In case of train travel, up to first AC is eligible.
• In case of road transport, rented vehicle / bus of any kind is eligible to claim LTA benefit.

13) In case spouse is working and spouse is also eligible for LTA, how LTA claim would work?

There is no change in IT rules in case spouse is working. However, smart way of claiming LTA is, one can claim in 1^st year and spouse can claim in 2^nd year. Similarly, one can claim in 3^rd year and spouse can claim in 4^th year. This way, they can enjoy 4 trips and also get the LTA tax benefit for the entire block year.

Also Read: Should employee negotiate on Gross Salary or Net Take Home Salary during job change?

14) Can we carry forward unclaimed LTA?

Yes. An employee can carry forward one trip to next block year. Means in a 4 block years, he can claim one trip and one trip he can carry forward to the next block year. During the next block year, instead of 2 trips, they can undertake 3 trips and claim LTA benefit. However, this has to be communicated to an employer so that they can make provisions in their books.

15) If an employee moves from one company to another company, how LTA can be claimed?

There are no specific rules if an employee moves from one company to another company. They need to go by the same rules and claim 2 claims in a block of 4 years.

16) If en employee travel at the end of the year and returns from a trip which falls beyond 31^st Dec, how does it work?

In such case, employee need to consider starting date as a basis and claim for that calendar year.

17) If en employee travel at the end of the block year and returns from trip after 31^st Dec which falls in a different block year, how does it work?

Block year for the current LTA period is from 1-Jan-2014 to 31-Dec-2017. Assume that you want to claim your 2^nd LTA amount and planned your trip from say 25^th Dec 2017 to 5^th Jan 2018. Since 1-Jan-2018 onwards is a different block period, you can still claim this trip under 2014-2017 block period.

18) My employer does not provide LTA benefit, can I make a trip and claim LTA while filing IT Returns?

LTA is a benefit provided by the employer. This is paid as reimbursement to you when you claim as per IT Rules. In case your employer does not provide this benefit, there is no way you can claim LTA. You cannot claim this while filing IT Returns.

19) I missed to submit my first LTA claim in a block year. Can I submit 2 LTA claims in a block year later?

As per IT Rules, an employee need to claim 2 trips LTA in a block of 4 years. However, if you have missed to claim in first 2 years, you need to indicate this to your employer, so that they can carry forward to subsequent 2 years of the same block year. You can later submit the bill pertaining to the first 2 years (bill date should indicate that) and claim it. However, you cannot claim 2 trips expenses in subsequent 2 years of a block period (with bill dates pertaining to 3^rd and 4^th year of a block period).

Also Read: How to get Rs 10 Lakhs and above a tax free Income and pay Zero Tax?

20) Do I need to submit a single bill for our trip or multiple bills would be accepted for LTA?

LTA benefit is given for a trip. Means, one family is travelling. Ideally, there would be one bill. However, there are cases where multiple bills would be received for a single trip (for airfare bills, where a family member agreed to join later and the booking was made later, but travel date is same of the remaining members). In such case, these are agreed by employers. It would be better to check with employer in such circumstances before proceeding further.

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Suresh
20 FAQ’s for claiming Leave Travel Allowance (LTA) as per Income Tax Rules

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