Leave Travel Allowance or LTA is a boon for the employed as it helps reimburse travel expenses to quite an extent. However, LTA can be a bit confusing for many people. We’re helping you decode it.
Did your last vacation leave a sizeable dent in your wallet? Is your bank account still reeling from the expenditure you incurred when you last travelled? Claiming LTA (Leave Travel Allowance) from your employer can help you recover a chunk of that cost. Not sure how to go about claiming your LTA? We’ll tell you how.
Most companies offer Leave Travel Allowance or LTA benefits to their employees as part of the salary package. This is usually exempt from tax and helps employees cover their travel expenses.
What is LTA Claim?
All salaried employees are entitled to claim a tax deduction on expenses incurred on travel.
- You can choose to travel by air, road or rail
- The travel, however, should be within India only. International travel is not covered under LTA exemption
- You are allowed to claim LTA exemption twice in a block of four calendar years. These blocks are decided by the government and are calendar years starting from January to December and not financial years.
- The current block runs from January 2014 to December 2017
- If you are entitled to LTA and skip travelling, then the entire amount is taxable.
What does LTA cover?
LTA claims cover only the cost of travel and not food, sight-seeing, accommodation or any additional charges. You need to submit the travel tickets in order to claim your exemption.
Who does it cover?
LTA claims cover only the immediate family like spouse and children. You can claim an exemption for only two children (for children born after October 1, 1998). You can claim an exemption for parents, brothers or sisters only if they are completely dependent on you. And in case your spouse is working, he/she too can claim LTA benefits, though not for the same journey.
What is the maximum limit of LTA exemption?
The LTA exemption is limited to the amount of LTA paid to an employee as part of his annual CTC. You cannot claim exemption beyond the amount specified in your CTC (cost to company). So, there’s no maximum limit on LTA that is specified by the government bodies.
Can an LTA claim be carried forward?
Yes, you can claim LTA for one journey in the first year of the next block as well. You can make another journey in the next block and claim it. In such a case, unlike the usual circumstances (where you can claim only two journeys in a block), you can claim three LTA’s in one block.
Can you claim LTA if you have changed jobs?
The best part about LTA claims if you have switched jobs is that you can claim LTA exemption from both the companies if you haven’t made a claim with your previous employer. You will have to submit supporting documents to the new company, however, to get the exemption.
Exemptions of LTA claims
These are certain scenarios under which you are not liable to claim your LTA tax benefits:
- If you aren’t one of the actual travellers, then you cannot claim your LTA.
- You will have to take the shortest route of travel in order to be entitled. For instance, if you decide to travel from Mumbai to Delhi, you can claim benefits only for direct travel between the two cities and not, for instance, for any intermittent stops at Agra, Haridwar or any other place on the way.
- You can claim tax benefit on your road travel only if your car is owned by central government organisations, state government or local authorities and not for your privately owned vehicle.
- If you did not get public transport and had to use private transport, then you need to submit all the bills to your employer or you can claim the same while filing your Income Tax Return.
And that’s how you get your money back after a well-deserved vacation. Simple, isn’t it?