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
In the current year i get Rs.6000/- for LTA in this year shall i claim half the amt in first six month & balance in other six month
or i a year only one time
Comment by seema — July 16, 2007 @ 5:55 pm
No.. only 1 trip per year and 2 times in the 4 year window can be funded by LTA
Comment by Ankur — July 16, 2007 @ 5:58 pm
If the travel is made by rented private car, one is entitled to get exemption on entire amount OR First AC rail ticket amount between the source and destination city?
Please clarify.
Comment by Mohit — December 10, 2007 @ 11:07 am
it should be full amount spend… but do check with ur finance department before embarking on the voyage
Comment by Ankur Aggarwal — December 10, 2007 @ 11:12 am
What if ur company doesnt have an LTA component? Can u still claim an LTA exempt from the Govt when u file ur taxes?
Comment by Mello — January 25, 2008 @ 2:58 pm
actually what u need to do is to sit with the finance guys and make them retype the Form 16 (or your salary declarations) in a way that for that particular Financial year, LTA is being claimed… (and your compensation is reduced by that much amount)
then you can easily claim LTA. BTW this is applicable for indian companies only.
Comment by Ankur Aggarwal — January 25, 2008 @ 3:13 pm
Two clarifications
1. In case I do not travel, can I encash the allowance with tax deduction for the full eligibility amount
2. If the above is possible, is it required to take compulsorily leave, in order to encah the LTA.
Comment by C T Rao — May 9, 2008 @ 12:52 pm
1. Yes you can. Or you could choose to carry the sum forward to the next year and then encash it at the end of the 4 year window. (and pay taxes)
2. It is important to be on leave when you are on a holiday. GoI still does not recognize work from home/holiday resort as work
Comment by Ankur Aggarwal — May 9, 2008 @ 2:34 pm
I have a straight forward question.
I joined my company on July 2005.
And was entitled to receive LTA of 3000 Rs.(500 each month). I forgot to claim it against any journeys.
Now any ways I cannot claim that for any journeys, but should I get the money after tax deduction or not?
Comment by Basavesh — May 13, 2008 @ 1:49 pm
correction…
I wanted the clarification for the period July 2005 – Dec 2005.
Comment by Basavesh — May 13, 2008 @ 1:51 pm
As far as I knew the LTA is not more than one month’s basic salary which is tax exempted twice in a block of 4 yrs?
Can it exceed one month’s basic? Say my defined LTA in company’s offer letter is 15000 and I spent 20000 on my journeys. Will I get the tax rebate on 20000 or 15000.
Comment by Abhishek — May 15, 2008 @ 6:17 pm
i think the limit is 20k INR.. just check with the finance/payroll guys in your company
Comment by Ankur Aggarwal — May 15, 2008 @ 6:20 pm
Query : i was working in small IT company Bangalore. The company deduct Rs. 900 for LTA evry month into my net Salary Amount. Now after 9 months i left the company and join in Pune. Now the problem is that my Banglore Prev company is not ready to give my LTA. So how can i claim with legal way ?
Comment by Dipesh Parekh — May 26, 2008 @ 4:59 pm
give a written complaint to the company’s Finance dept.. and if they don’t take any action on it for 2 weeks then u can take legal action
Comment by Ankur Aggarwal — May 26, 2008 @ 7:20 pm
my basic salary is 11335 & i have recd LTA from co is Rs.6204,
I want to know how they have calculated the LTA.
Comment by MAHESH KULKARNI — June 4, 2008 @ 9:19 am
I havn’t applied for LTA in the block 2006-2009. Planning to go on vacation from December 20, 20008 and will be back only on January 2, 2009.
My question is, Can I claim LTA benefit again in the financial year 2009-2010 ? (Probably my travel will be in October 2009)
Comment by Anjeev George — June 6, 2008 @ 6:15 pm
Hi
The limit for tax exemption – is it INR 20,000/- per year or INR 20,000/- per trip (i.e. INR 10,000/- per year)
Pls clarify.
Thanks
Comment by Andy — August 6, 2008 @ 1:33 pm
Hi,
I just want to recheck whether LTA limit is just Rs 20,000/- , my LTA is 90,000 !!!!
Sencondly my company is not accepting car bills, i am planning to go to Manali ,from mumbai to chandigarh by air & than rent a car, company i not accepting car bill.Would like to know etails about rules for car renting bill
Regards
Comment by Nilesh — September 25, 2008 @ 7:12 pm
I havn’t applied for LTA in the current block . Planning to go on vacation from March 5, 2009
Can I able to claim the first LTA.
Again Can I able to claim the second LTA in the year 2009?
Comment by Ashish — November 11, 2008 @ 6:06 pm
I wish to claim the LTA for the block 2006-2009 & having following doubts:
1. Can I claim two LTA exemptions in same year. i.e. can I claim LTA for Aug’08 & Dec-08 ?
2. Can I include my Husband’s expenses also in my LTA claim, though he is not in my dependents list ?
3. Can I claim LTA now for Dec’07 & Dec’08.
Thanks in Advance,
Taru
Comment by Taru — January 7, 2009 @ 3:14 pm