4 Things You Must Know About LTA

  Author: Abhijit Banerjee

Your pay package consists of several components such as salary, allowance, incentives and perks. Some allowances are reimbursed by the employer and help you reduce your tax liability. One such is Leave Traveling Allowance (LTA). Here are few things to know about LTA, before you make a claim for it.

Can be claimed if part of salary LTA can be claimed if it is a part of a person’s salary. Also, it can be claimed only to the extent of actual cost incurred on travelling or to the extent allowed by the employer, whichever is less. Other expenses such as hotel bill or foods cannot be clubbed with travelling expenses.

Includes travelling expenses of self and family It can be claimed against the travelling expenses of the employee and family within the country. Family includes spouse, dependent children’s and parents.

Reference of block of four years LTA can be claimed against two journeys performed in block of four calendar years. Current block is 2014-17.Unclaimed exemption can be carry forwarded to next year. For instance, if you are eligible to claim LTA of Rs 20,000 each year, but you only claimed Rs 15,000, it will get carried forward to the next year and you claim up to Rs 25,000 next year.

Permissible for shortest possible journey The journey should be performed through the shortest possible route. In case of travelling through air, one can only claim exemption for economy class air travel. In case of train travel, AC first class fare can be claimed as exemption.