Complete information on LTA (leave Travel Allowance) Tax Exemption--

Complete information on LTA (leave Travel Allowance) Tax Exemption





Leave Travel Allowance (LTA) is basically defined as the cost of travel granted to employees to travel anywhere in India, while on leave from work. The amount of exemption depends upon the mode of travel, and it is allowed only towards the travel fare, and not for boarding and lodging. It is allowed twice in a block of four calendar years. The current block is 2010-13. So, for the period 2010-13 one can claim this exemption for any two occasions.





If in a particular block one is not able to claim LTA exemption for one or both journeys, then one journey can be carried forward and can be claimed in the first calendar year of the succeeding block. And thereafter, claim the remaining two journeys of that particular block of four years can also be claimed.





For example, a person was not able to perform any travel in the previous block, i.e., during 2006-09. He can carry forward one journey to the current block, i.e., 2010-13 and claim it in 2010, the first calendar year of the block. and later on he can also claim the remaining two journeys of the block 2010-13. In a way, he will be able to avail three exemptions in the block 2010-13.





It is not mandatory for the employee to submit travel bills to the employer to claim LTA. As per Supreme Court judgment in 2009 made it clear that the employers do not have a statutory obligation to collect travel bills from their employees to allow the LTA exemption. Though many employers still insist employees to submit bills even though it is no longer mandatory.





If at all one fails to claim LTA and the employer deducts taxes on the amount paid, one can claim the same in the income tax return, and accordingly can get a refund of the tax that had previously been deducted.





The travel exemption is available for only the following who can accompany the reciepient of LTA

* Spouse and up to two children

* Parents and brothers and sisters who are mainly dependent on you





You must be traveling with your family on the journey to claim LTA, otherwise the journey will not be eligible for exemption.





Please note that the entire holiday cost is not covered. Only the cost of to and fro travel is eligible. Expenses incurred towards boarding and lodging or on local conveyance to and from the station/airport do not qualify for any exemption.





The travel concession received by the employee is exempt up to the amount spent on travel or the following specified limits, whichever is less:





* For air route Economy air fare on National Carrier by shortest route is provided.

* For any other mode than air:

i) Destination connected by rail:  First AC rail fare by shortest route.

ii) Destination not connected by rail:

a) Where recognized public transport system exists:

First class or deluxe class Rail fare

b) Where recognized public transport system does not exists:

First AC rail fare for equivalent distance





Precisely, if one is traveling by air, then the economy fare on the national carrier on the shortest route is the amount to be exempted. If one is traveling by any other mode other than air, then if the destination is connected by rail, the first class AC fare by train on the shortest route is exempted. And for destinations not connected by rail, where recognized public transport exists the first class or deluxe class fare is exempt or where no recognized public transport exists AC first class rail fare is exempt for equivalent distance



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