Leave Travel Allowance | Tax Savings For Travelling

Leave Travel Allowance (LTA) is a beneficial provision that helps employees travel with their families within India without having to worry about major expenses. LTA helps to reduce taxable income while encouraging domestic travel. This article explains LTA in detail and guides how to claim it.

What Is LTA?

LTA full form stands for Leave Travel Allowance. It is an allowance given by employers to employees to cover travel expenses when they go on vacation. This benefit is part of the salary structure and is aimed at providing tax savings for travelling details in India.

Leave Travel Allowance was introduced to reduce taxable income under Section 10(5) of the Income Tax Act. It covers costs for travel by air, train, or public transport within the country. Employees often compare LTA with the transport allowance exemption under section 10(14) to plan their maximum exemptions effectively.

LTA Exemption Details

The points mentioned help to understand the key details of the LTA Exemptions. Read the points to understand them better:

• The maximum amount that can be claimed is limited to the total travel expenses.

• An employee can claim these benefits twice in four years.

• Only allowed for domestic journeys.

• Airfare claim: it can be claimed in two ways, either the actual amount spent or the fare of the shortest route to the destination, whichever is lower.

• Train fair claim: it can be claimed in two ways, either the expense of a first-class AC ticket for the shortest route or the actual amount spent, whichever is lower.

• If other modes of transport are used, then only the recognised mode of transport will be allowed for the claim. For instance, a first-class bus ticket.

How To Claim LTA?

Employees can use a tax savings for travelling details calculator to estimate eligible claims before submission. To claim LTA benefits and make the most of income tax savings for travelling details:-

Step 1: Plan the journey within the country.

Step 2: Inform the employer about the trip and the days of absence.

Step 3: Submit proof of the trip to the employer.

Step 4: Fill out the LTA claim form.

Step 5: Submit the form.

Special Cases

In case employees wonder how to claim LTA without travelling, it is important to note that unclaimed LTA cannot be encashed without valid proof. Such as:

1. Retired employees can claim their LTA post-retirement. They will be given a specific period during which they can travel and claim the LTA.

2. Terminated employees can only claim their LTA before their termination period.

3. If your LTA goes unclaimed, then you can claim it during the first year of the next four-year block.

You know you can now save upto Rs 50000 in tax with the help of LTA. How? Watch this detail video by Jaagruk Bharat.