LTA Rules

Leave Travel Assistance (LTA) has got a tax treatment which is quite different from all the other type of allowances and perquisites that you get. And that’s the primary reason it is the one that gets people confused more often than not.
The following points need to be kept in mind while taking the LTA or producing bills for it:

1. You can claim the LTA money every year regardless of whether you are going to claim tax deduction on it or not.
2. If you do not wish to claim LTA in one particular year you can have your employer carry – forward your LTA for the next year.
3. For getting LTA tax exempt you will have to produce bills, but you can’t get your LTA exempt every year.
4. You can get your LTA exempt twice in a block of four years. Right now the block that is relevant is 2006-2009. This block is decided by the Government so does not have a bearing on when you start your job and also these blocks are calendar years and not financial years.
5. The bills can be air, rail or even a private rental company however the exemption is only for domestic travel so an international ticket won’t do.
6. The bills have to be for a journey that has been undertaken when you are on leave and should be for you and your family that is spouse, children and dependant parents, brothers and sisters. Its obvious that your family can’t claim the exemption if you have not accompanied them.
7. If you and your wife both get LTA although obviously both of you can’t claim exemption for the same travel but you can avail exemption independently for different travels. So effectively between the two of you, you can claim exemptions four times in four years.
8. If for some reason you fail to claim exemption in the bucket of four years you still have the option to claim exemption in the first year of the next block.
9. Only travel bills can be used exemption, so a hotel bill can’t be produced for claiming exemption even though you might have stayed in the hotel during your leave.
10. The maximum LTA for the purposes of tax exemption is Rs.20000 so normally any most organizations design the salary structure in such a manner that they don’t give the employees more than Rs. 20000 as LTA.
11. In terms of proof for air travel although there is no fixed rule as such it might be a good idea to preserve the boarding pass along with the ticket to make sure there are no problems in claiming exemption later on.
12. LTA can only be claimed for the short distance between two places. So if you are planning to travel from Goa to Mumbai then you will be allowed exemption on tickets from Goa to Mumbai and bac. You will not be allowed to produce tickets that are via some other place like Mumbai to Hyderabad and then from Hyderabad to Goa and so forth.
13. LTA can only be claimed on tickets or rented private vehicles, you cannot show petrol or diesel vehicles for your own vehicles and then claim exemption on it.

- Source onemint.com

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41 thoughts on “LTA Rules

  1. 1- whether taxi fare is allowed?
    2-minimum number of leaves required?
    3-whether LTA can b claimed for travelling during official holidays?
    4-if only family travel and employee keeps on attending office?
    5-is there any maximum limit of LTA (tax exemption); if yes where it is provided. (RS 20000/-)

  2. Dear Sir,

    I have claim for LTA in Dec. 2009 for 2 Years (January 2008 to December 2009). I have produce bill of my travelling in June 2008 in December 2009.

    Pl Clear me is it taxable or not.

    Regards,

    Mukesh Gupta

  3. Hi,

    I have declared my LTA as 40000rs. But I claimed only 25000rs. But I resigned In 25th-Feb-2010 itself. I have been working for 5yrs for this company. Now they are saying they will calculate LTA as pro-rata basis and hence I’ll get only 10810 only instead of 14500. (Ofcourse taxes will be deducted on this)

    My CTC doesnt have any seperate component as LTA. I could opt for LTA, then it’ll be taken from Special Allowance.

    Should I get 14,500rs or 10810rs? (before taxes apply)

    Please let me know.

    -ram.

  4. can i claim LTA in the month of November and produce the bill for the month of March (actual LTA). can my accounts and HR treat the amount given earlier as advance LTA and attach the original bill with that? pls. guide

  5. Hellow sir,
    I am working in MNC since 2010 but i could not claim the year 2010&2011. now can i claim 2010-2012 if possible… please replay….

  6. Can LTA/LTC be claimed without taking leave or actual travel? What is the IT rule for it and how much tax will be deducted for the same.

  7. Best LTA strategy

    Buy train tickets to the farthest place from where you are posted by the highest class you are entitled to. Take photocopies – then cancel your rail tickets. Then with the money go where you want, how you want. Ensure however that your leave coincides with the dates of the tickets that you have cancelled. Ensure that you are out of your house even if in another house in the same city.

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