· The employee should take leave from his company
· S/he should actually travel
· The necessary travel documents must be submitted as proof that the travel has taken place
In order to claim the LTA benefit, you can travel alone or with your family. But your family cannot travel without you. “Family” includes your spouse, children, your dependent parents; and brothers and sisters (again, no limit specified), provided they are mainly dependent on you. It is not necessary for you to declare your dependent family members at the time of joining the company and neither does it depend on any specific company policies.
Below is a table that gives the amount of LTA you can receive depending upon your mode of travel:
Mode of Journey Amount of Fare you Receive
By Air
Economy class national carrier via shortest route.
By Railways
AC 1st Class Fare via shortest route.
By any other mode of Transport
If recognized public transport exists, then the 1st Class Deluxe fare; else an amount equivalent to the AC 1st Class Rail fare.
Note that accommodation, food, sightseeing, airport/rail transfers etc. are not covered under the LTA scheme. Only the above-mentioned transport cost is covered for exemption.
Important: LTA exemption is available only for journeys undertaken within India.
There are 2 ways you can receive the LTA benefit:
1. Monthly salary:
2. Reimbursement:
Here, you first travel while on leave and preserve relevant documents. You need to submit them once you return. Your employer will them reimburse the applicable amount in the next payment cycle or as per company rules.
LTA can be claimed only twice in a block of 4 calendar years. These blocks are fixed by the government. The present blocks are 2006-2009 (i.e. January 1, 2006 to December 31, 2009). If the employee fails to avail the exemption in a particular block, he can avail the same in the next block of four years, as a “carry over” option. But he should avail of one in the first year of the next block. Also, you cannot claim more than one LTA benefit in a calendar year. Interestingly, you can claim LTA exemption from your previous employer too, if you have not utilized the benefit there (so long as it is claimed within the same block of 4 years).
10 comments:
Very informative. It means I can now approach my ex-employer as I have not claimed LTA from them as yet! Calculating may be a bit of a bother, but let's see. After all, if I can save a thousand rupees, it'll be worth my effort.
Thanks for such useful information
Apart from employees, what LTA is benefitted to the employer?
Is there any maximum amount limited for claiming for LTA?
Dear Benjamard,
In our view, there is no benefit for the employer. It hardly matters to the employer whether he pays salary or any allowance to the employee. For him, the money just goes out. If the employee claims LTA, he can save tax and if he doesn’t claim, the allowance will be taxed. But either way, for the company, the same amount goes out from its account.
About the maximum amount that can be claimed, the law does not specify any such ceiling.
Regards,
Team Taxsmile
Is it true that we need not submit any proofs for LTA as per Supreme Court order.
So in this case, is it enough if we just avail leave. Kindly clarify how this SC order works.
LTA can be claimed only once in a year. But what if two journeys are made, once before Dec' 09 (say in Oct' 09) and other after Dec' 09 (say in Jan' 09) then can these two LTA be claimed in finnacial year 2009-2010? (As 2006-09 being current block and 2010-13) being next block?
are managers from standalone restaurants entitled for leave travel allownce.
If i want to claim 15000 in cash, will that add to my gross salary or will there be any tax on it?
My CTC includes Rs. 14000 per annum as LTA amount (i.e. Rs. 56000 for the block of 4 years). I understand that LTA exemption can be claimed only twice in four years. Can I claim exemption of upto Rs. 28000 twice in the block or only upto Rs. 14000 (amount for the year when I am claiming the exemption) ??
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