Questions related to leave travel allowance
How is LTA calculated in India?
LTA is added to the salary structure by the employer based on various factors such as title, position, pay scale, etc. The LTA benefits can be availed only if it is a part of the salary structure. You can claim for the LTA when you have traveled alone or when with family as well.
Is LTA compulsory in India?
Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit to employer based on LTA policy of the company/to tax authorities on demand.
How many times LTA can be claimed?
How often can one claim LTA? LTA exemption is allowed as per block calendar years created by the Income Tax Department. You can claim LTA exemption for two journeys taken within a block of four years.
What is the maximum LTA limit?
Full LTA that is part of CTC can be claimed with receipts.
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| Component | Month/ Annual | Max. Tax Exemption |
|---|---|---|
| LTA | 1k/12k | No Maximum limit |
| Personal Allowance | 11k/131k | FULLY Taxable |
| Total | 23k/276k |
How is LTA calculated?
LTA Example
For example, Raj is entitled to an LTA amount of Rs 35,000. He has claimed an amount of Rs 20,000 in FY 2017 as his leave travel claim. The LTA deduction applicable in this case is only Rs 10,000, and Rs 15,000 gets added to his taxable income.
Can LTA be claimed every year?
Terms and Conditions For LTA Claim
LTA benefits are available for travel expenses and exclude payment towards food and stay. You can only claim the LTA twice in a block of four years. A block year is not like a financial year, and the Government of India decides it.
What is the current LTA block period?
The current block of four years covers the calendar years 2018, 2019, . Since both these calendar years fall in the same block, you can claim the exemption for both these consecutive calendar years in case you have not claimed the LTA exemption for .
Can LTA be claimed every month?
It should be noted that the employee can not claim LTA in every financial year. LTA can be claimed only for two journeys in a block of 4 years. The block years for the LTA purposes are decided by the government.
How do I avoid LTA tax?
If you are married, one strategy that could help you avoid crossing the LTA threshold is to redirect your retirement savings into your spouse’s pension, as they will have their own separate Lifetime Allowance. This can be an effective way of avoiding the limit.
How much is LTA of basic salary?
Note: The salary structures is updated effective FY 2021-2022.
| Component | Recommendation |
|---|---|
| HRA | 50% of Basic + DA if metro and 40% if non-metro |
| Conveyance | Rs. 1,600 a month |
| Medical | Rs. 1250 a month |
| LTA | No real benchmark, can even be used as a plug, but if not can set as 10% of Basic |
Can I claim LTA without travelling?
In October 2020, due to the covid-19 pandemic, the government announced an LTC cash voucher scheme that allowed salaried taxpayers eligible for LTC/LTA to claim the allowance tax exempt without travelling by purchasing goods and services as per the scheme’s conditions.
Can we claim hotel bills in LTA?
LTA covers only the cost of travel for the trip. Hotel accommodation, food, etc. cannot be claimed for exemption.
Can LTA be claimed for travel by taxi?
You can claim taxi fares as part of LTA only if there’s no bus service available to reach the destination. You will need to check the distance travelled by taxi and can only claim the first class rail fare applicable for that distance.
How does leave travel allowance work?
Read about the Leave Travel Allowance (LTA) that is provided to the employees for travelling. The exemption is restricted to fare cost for touring in India. The Leave Travel Allowance is an allowance given by the employers to their employees, which can be utilised when they go for a vacation.