What Do You Mean By Leave Travel Allowance (LTA)
Leave travel allowance (LTA) is basically that allowance which is paid by the head of the company / employer to their employees, which is paid to the employees as a part of their salary. Or it can be expressed as a common form of tax exemption given by most of the employers to their employees. The importance of leave travel allowance is a help to the employee when they travel with his family or alone but the expenses is given by the company every year.
It’s not true that the amount which you get as leave travel allowance is tax free every time, you can claim Exemption from the tax on this amount in every four – years twice, and it is allowed by the income tax department. Suppose if you claim exemption for LTA in between 2010 to 2013, here you can claim twice in between this four year, but if you skipped to do so then it will shift to the next four years i.e. 2014 to 2017.
There are few questions which come in your mind:
What does leave travel allowance covers?
The leave travel allowance which is provided by the employer to their employees covers only the Cost of Travel expenses for the journey. The expenses of Hotel accommodation (Stay), Food, Sightseeing … etc are not included. And the traveling should be done within the country.
Who are eligible for Leave travel allowance?
You can claim for exemption if you are travelling with your family member, which includes Spouse, your children born after 1998 and it is accepted for your parents, brother and sister if they are totally dependent on your salary / income. If your parents, brother, and sister is employed then you can’t claim for leave travel allowance.
How many times claiming of LTA can be done?
It is allowed by the Income –Tax –Department and the leave travel allowance can be claimed twice in every four year i.e. in each block you can claim two times. Example: Between(2010 to 2013), (2014 to 2017) and so on…
Transport that LTA covers?
Leave travel allowance covers the travelling done by the employee through Railway, Airways, and from any other public transport, but the proof of travelling should be kept safely with the employee as it may be needed by your employer.
What if I spend more than LTA?
The leave travel allowance amount is limited and if you are travelling with your family and crossed the limit of leave travel allowance provided by the employer then you won’t be able to take the tax benefits other than your LTA. If your LTA is 24,000 this year and if you spend 48, 000 while travelling with your family / alone the extra amount of 24,000 won’t be giving you any of the tax benefits.
Can I claim LTA of two times in a single financial year?
Yes, this is a very common question that arises in the mind of employees you can claim both the leave travel allowances in a single financial year if required.
Can LTA be carried forward?
Yes, if you have claimed for once in a block you can claim the left out LTA of first block in the succeeding block. For example if you have travelled once in the first block you can travel once again in the first year of the next block and claim the left out leave travel allowance. So it can be concluded that you can claim three LTA in total.