Understanding Leave Travel Allowance (LTA)

What is LTA?
Leave Travel Allowance is a type of allowance given to the employees to cover their travel expenses when they go for a vacation with their family.

Family includes:

1. Spouse
2. Maximum two children born after 1 October 1998, children born before this date do not have any restrictions.
3. Parents if they are dependent on the employee
4. Brothers or Sisters if they are dependent on employee

LTA is exempt from tax u/s 10(5) of Income Tax Act, 1961.

Conditions for claiming LTA:
1. Actual journey must be taken in order to claim LTA

2. LTA covers only domestic travel; one cannot claim international holidays under LTA.

3. Expenses made for food, shopping, local travel, hotel accommodation, etc. is non-exempt.

4. Amount claimed cannot exceed the annual LTA amount provided by the employer.

5. Exemption is allowed only twice in a block of 4 years as decided by the Income Tax department.

6. Only economy class airfare by the shortest route, first class train fare.

7. In case journey done by other mode of transport and not by air or train but by other mode of transport, the maximum amount claimed cannot exceed the first class train fare to the destination.

8. The journey done during weekends are not eligible. Journeys done during working days are eligible for LTA claim.

Thus if you go for a holiday with your family, know these facts and claim LTA to save tax.

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