Leave Travel Allowance (LTA) is an allowance paid by an employer to employees for travel within India, alone or with family. As understood, the allowance is only for travel expenses incurred. Thus, any overhead expense such as that for shopping, stay, food, etc, are not covered under this head. The LTA is tax exempted and its taxability falls under the Section 10(5) of the Income Tax Act, 1961 with Rule 2B.
In this post, we will discuss about list of exempted expenses from LTA, how to claim leave travel allowance, proof for travel,
Here is the required list:
When preparing the salary structure, Leave Travel Allowance is not a mandatory particular. But, if you are claiming LTA, then check for its presence in the pay structure.
Here are the limitations to the LTA:
It purely depends on the employer as to which employee he/she will provide the Leave Travel Allowance.
The LTA benefit is not entitled to all the employees, based on various factors such as grade, pay-scale, etc. an employer decides whether a certain amount can be allocated for LTA. In order to be eligible for the LTA, the employee should take leave and travel, the LTA is provided for travel within India where it is a round-trip with or without family members.
Here are the required documents:
From the above-given information, it is clear that the LTA deduction is for the shortest route between the origin and destination spot, and back. For instance, if you are eligible for Rs. 20,000 LTA, but have claimed only Rs. 10,000, then the LTA deduction will be of Rs. 10,000 only. The rest of Rs. 10,000 will be credited with your income, and shall the liable to applicable taxes.
NOTE: When raising a claim to tax authorities for LTA exemption, you do not have to submit proof of travel. However, you can always ask for the travel proof from your employer for safety. The proof of travel may include flight tickets, duty pass, boarding pass, etc. The employer may certify the domestic LTA claim and add it to form 16.
Here are the LTA FAQs:
Several companies follow the provision of Income Tax Act strictly, and allow you to claim LTA only if the travel is undertaken in the period of the approved leave duration. If the travel is done on official holidays or weekends, then the organization may not accept the Leave Travel Allowance claim.
As per the Income Tax provision, you can avail LTA for travel cost for anywhere in India when on a leave. The mode of transport could be air, rail, or a public transport from the place of origin to destination on the shortest route. In case you have to travel different parts of India in a single vacation, then exemption is valid only for the travel cost from the origin spot to the farthest travel spot in vacation that too on the shortest route.
You can avail LTA exemption for only one trip in a financial/calendar year.
If you do not avail the exemption on LTA for one or two journeys in a given block of 4 years, then you can carryover the exemption in the next block. But, to claim the benefit, you have to complete the travel in the first calendar year of the block, after the succeeding block.
The exemption for Leave Travel Allowance purely depends on the LTA particulars in the compensation package. Thus, you can claim up to the LTA amount you are eligible in your package particulars after furnishing the travel proofs.
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