The Leave Travel Allowance (LTA) enables salaried employees to claim travel expense tax deductions, which can reduce their taxable income in certain circumstances. Employees are eligible to get reimbursement for travel expenses incurred while on leave, which includes public transportation, such as trains and flights, which are often covered by the LTA. Nonetheless, the amount of compensation is decided by the actual expenses or constraints imposed by tax authorities or employers.
Who can claim LTA?
LTA, or leave travel concession, is an allowance included in employees’ salary packages that covers travel expenditures incurred while on leave.
Any employee can claim an LTA deduction if their company offers it as part of their pay. Employees who receive LTA as part of their salary are eligible to claim a travel expense exemption under Section 10(5) of the Income-tax Act of 1961. This covers travel for oneself, one’s spouse, and one’s kids while on leave. In addition, if they are entirely or primarily reliant on the employee, parents, siblings, and sisters may qualify.Also read: How to claim LTA: Eligibility, LTA rules, documents you need to submit, how much amount you can claim and more
Is LTA exempt from tax?
LTA is tax exempt in certain cases as per Section 10(5) of the Income Tax Act, 1961.
When is the last date to block LTA?
Taxpayers are only permitted to claim LTA for a maximum of two journeys within a four-year period. Currently, January 1, 2022, through December 31, 2025, is the block period. So, the last date to block the current LTA is December 31, 2025.
How often can one claim LTA?
Taxpayers can claim LTA for a maximum of two journeys in a block of four calendar years. The current block period is January 1, 2022, to December 31, 2025. If an employee doesn’t utilise the full LTA entitlement within a block, the unused portion can be carried forward to the first year of the subsequent block.
LTA exemption limit
If you are eligible for LTA, you must travel and provide your employer with the original documentation of your trip in order to claim the reimbursement. If you did not travel while on leave, you are not eligible for this exemption. LTA does not allow for the claim of other expenses like lodging, meals, and stays. Transfers between the airport and the hotel, or vice versa, are not allowed. Exemption for travel expenses within the city is not allowed.
Can you claim LTA for domestic and international travel?
LTA exemption is only applicable for travel within India. International travel is not eligible for LTA exemption.
To claim LTA, an employee needs to submit following documents:
a) Original bills of journeys such as bus tickets, railways tickets, etc.
b) In case of travel to a place where train or air facility is not available, original bills issued by a car rental company in case of car hire
c) In the case of air travel, air tickets and boarding passes
d) Bank/credit card/debit card/ wallet statements from which the payments were made
The above documents should be submitted with signed Form 12BB as evidence of expenditure. It is better to submit all the LTA-related documents to the employer during the relevant financial year.
Any unused LTA can be carried over to the first year of the next block if an employee does not use their entire entitlement within a block.
