Leave Travel Allowance (LTA) is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it. An LTA is the remuneration paid by an employer for Employee’s travel in the country, when he is on leave with the family or alone. LTA amount is tax free. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B (Commonly known as LTA Rules), provides for the exemption and outlines the conditions subject to which LTA is exempt. Through this write-up, I want to shed light on the taxability and some other interesting relevant aspects which you as a salaried employee must keep in mind.
Exemption of Fare Only As per LTA Rules, LTA exemption can be claimed where the employer provides LTA to employee for leave to any place in India taken by the employee and their family. Such exemption is limited to the extent of actual travel costs incurred by the employee. The total cost of the holidays is not covered, only the travelling cost is covered.
Travel within India only allowed- As per LTA Rules, travel has to be undertaken within India and overseas destinations are not covered for exemption.
Exemption on Actual Travel Expense – For example, where an employer provides LTA of Rs. 25,000, but an employee spends only Rs. 20,000 on the travel cost, then the exemption is limited to only Rs. 20,000. Travel cost means the cost of travel and does not include any other expenses such as food, hotel stay etc.
Meaning of Family for LTA :– As per LTA Rules, the meaning of ‘family’ for the purposes of exemption includes spouse and children and parents, brothers and sisters who are wholly or mainly dependent on you. An individual would not be able to claim the exemption in relation to his parents, brother or sisters unless they are wholly or mainly dependent on the individual.
Restriction on Number of Children for Claiming LTA :- As per LTA Rules, exemption is not available for more than two children of an individual born after October 01, 1998. This restriction does not apply in respect of children born before this date, and also in cases where an individual, after having one child, begets multiple children (twins or triplets or quadruplets, etc.) on the second occasion. The term “Child” includes a step-child and an adopted child of the individual.
Page Contents
Is LTA exemption available every year?
No. The LTA rules provide for an exemption only in respect of two journeys performed in a block of four calendar years. The current block runs from 2018-2021. If an individual does not use their exemption during any block on any one or on both occasions, their exemption can be carried over to the next block and used in the calendar year immediately following that block.
In such cases, the journey performed to claim such exemption will not be counted for the purposes of regulating future exemptions allowable for the succeeding block. For example, Mr. X joins an organisation on April 1, 2016 and is entitled to a LTA of Rs 30,000 per annum (financial year 2016-17).
X undertook a journey in December 2016 and used his exemption. However, for his LTA entitlement for 2016-17, he did not undertake a journey during the calendar year 2017.
He can undertake the journey in 2017 to claim the exemption in relation to the LTA. He would also be able to use the LTA benefit for two other journeys which he can undertake in the current block 2018-21 in relation to his LTA entitlement for future years.
Proof of travel to claim LTA
Supreme Court has held in the case of Larsen & Toubro and ITI that employers are under no statutory obligation to collect bills and details to prove that the employees had utilised the amounts obtained against these claims on travel and related expenses.
Employers while assessing the travel allowance claims, do not need to collect proof of travel to submit to the tax authorities. Though it is not mandatory for employers to demand proof, they still have the right to demand documentary proof depending on its policy. The Judgement of Supreme Court has only moved the responsibility from the employer to the employee, the assessing officer can still ask for the employee to provide details of travel.
The individual however needs to keep copies for his or her own records. Such proofs are helpful at the time of the audit of the tax return of the individual. Proof of travel could be, for example, tickets, boarding passes, invoice of travel agent, duty slip etc .
Here we would like also to draw attention of the employers to Circular No. 8/2013 dated 10-10-2013 which says that in respect of LTA The employer has to satisfy the obligation that leave travel (fare) concession is not taxable in view of section 10(5) the employer is not only required to be satisfied about the provisions of the said clause but also to keep and preserve evidence in support thereof. In our opinion the circular failed to take into account SC Judgment in the case of Larsen & Toubro and ITI and Employer are not bound to mandatorily preserve the Documents.
During the Fringe Benefit tax (FBT) regime, provision of paid holidays, including travel cost to any place, stay expenses etc. were subject to FBT in the hands of employers and were not taxable in the hands of individuals. Many employers extended the paid holiday benefit instead of LTA.
Now with the elimination of FBT , with effect from. April 1, 2009, paid holiday benefit is fully taxable in the hands of employees and, therefore, employers are reintroducing the LTA element by withdrawing the paid holidays benefit.
Does claiming LTA in alternate years mean that the two year entitlement gets added together?
It does. If you are entitled to an LTA of Rs.10,000 per year and do not utilize it for the the first year it is carried forward to the next year. In the second year you can claim the entire amount (Rs.20,000) as tax exempt provided you spend it according to the specification in LTA tax laws as detailed above.
Carry over concession for Leave Travel Allowance
Leave Travel Allowance (LTA) comes with a carry forward feature. You can carry forward your Leave Travel Allowance in the situation that it has not been used. It can be brought forward and claimed in the first year of the next block. Here we would like to mention that only one LTA can be brought forward and claimed in the first year of the next block. For instance, “the 4-year block for your LTA is 2014-2017. During that period, if you did not claim LTA or claimed it only once, then you will be allowed to carry forward one LTA to 2018 (first year of next block, i.e. 2018-21). Thus, from 1st Jan 2018 to 31st Dec 2021, you will be able to claim LTA three times. However, if you do not claim the LTA (brought forward from the previous block of 2014-17) in the first year of the current block (1st Jan 2018 to 31st Dec 2018).
Can I Claim LTA Twice in a Year
Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other in case your spouse is also working.
LTA in case of Switch of JOB
If you switch jobs, you can get the LTA not only from your present organisation but also from your former employer, if the concession is lying unutilised. Let’s say that, in the 2010-13 block, you claimed LTA in 2011. In 2012, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
Amount Exempted under LTA Rules
1. Journey performed by Air – Economy Air fair of National carrier by the shortest route or the amount spent which ever is less will be exempt
2. Journey performed by Rail – A.C. first class rail fare by shortest route.or amount spent which ever is less will be exempt.
3. Place of origin and destination place of journey connected by rail but journey performed by other mode of transport other than air- A.C. first class rail fare by shortest route or amount spent which ever is less.
4. Place of origin & destination not connected by rail(partly/fully) but connected by other recognised Public transport system – First class or deluxe class fare by shortest route or amount spent which ever is less.
5. Place of origin & destination not connected by rail(partly/fully) and not connected by other recognised Public transport system also – AC first class rail fare by shortest route (as the journey had been performed by rail) or the amount actually spent ,which ever is less.
Extract of Section 10(5)
“Section 10(5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—
(a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;
(b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,
subject to such conditions as may be prescribed (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government :
Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.
Explanation.—For the purposes of this clause, “family”, in relation to an individual, means—
(i) the spouse and children of the individual ; and
(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual;
Conditions for the purpose of section 10(5) as Prescribed in Rule 2B of Income Tax Rules- Extract of Rule 2B
2B. (1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,—
(a) on leave to any place in India;
(b) to any place in India after retirement from service or after the termination of his service, shall be the amount actually incurred on the performance of such travel subject to the following conditions, namely :—
(i) where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination;
(ii) where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and
(iii) where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997, between such places, the amount eligible for exemption shall be :—
(A) where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and
(B) where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.]
(2) The exemption referred to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986 :
=[Provided that nothing contained in this sub-rule shall apply to the benefit already availed of by the assessee in respect of any number of journeys performed before the 1st day of April, 1989 except to the extent that the journey or journeys so performed shall be taken into account for computing the limit of two journeys specified in this sub-rule.]
(3) Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of four calendar years shall be eligible for exemption.
Explanation : The amount in respect of the value of the travel concession or assistance referred to in this sub-rule shall not be taken into account in deter-mining the eligibility of the amount in respect of the value of the travel con-cession or assistance in relation to the number of journeys under sub-rule (2).]
[(4) The exemption referred to in sub-rule (1) shall not be available to more than two surviving children of an individual after 1st October, 1998 :
Provided that this sub-rule shall not apply in respect of children born before 1st October, 1998, and also in case of multiple births after one child.]
Republished with amendments
Image courtesy of bplanet at FreeDigitalPhotos.net
Author Bio
Hi,
I travelled from Bangalore to Jammu via Delhi by air with my family. From Jammu we travelled to Srinagar by road for sightseeing. Our return journey to Bangalore was from Srinagar via Mumbai by air. Can I claim LTA for the trip, since my destination was Jammu while going to J&K, but I travelled back from Srinagar on return journey? Please advise if I can claim LTA exemption for the airfare.
Thanks.
Hi, I have recently undertaken a road journey of 2000 kms (1000 kms each way) for vacation with my family. Mode of transport was my own vehicle. 1AC Fare for equivalent distance is about INR 3k per person, each way, hence my exemption limit would be about INR 36k (3k x 2 way x 6 persons). I have retained the receipts for fuel expenses.
Query – Just 3 days prior to embarking on the journey, I have got a check-up servicing for my vehicle, specifically for this trip (normal servicing was not due for another 3 months, this was ONLY for this trip). Can I include the cost of such servicing for my LTA exemption? Basis for my logic is that if I had paid for a taxi, I am paying not only for the fuel but also for his maintenance of the taxi vehicle, which is included in the per km rate charged by the taxi operator. Hence, if such expenses are allowed, why not maintenance of my own vehicle for the purpose of undertaking this trip?
Would appreciate your opinion on this. Thanks.
1: Very good and detailed article, thanks for posting this, Just request, as company people do not relay on details mentioned on websites, Please provide references link to Gov website that companies can take for review
2: Question: what is the concept of shortest route, is the the distance given on IRCTC site or Google MAP ?
3: Question: I traveled from Kolkata to Digha beach which is 200 Km by Taxi, But for LTA company says they will only consider 1st class train fair by shortest route. The One way fair is Rs 1025, so ideally the total to-fro fare of 2048 should be considered for LTA
Where as, as per distance the total distance is 371, with total distance the fair comes to Rs 1550.
Which amount should be considered for calculation? the sun of to-way fare or the fare as per total distance.
Please suggest
Whether the travel origin should be same employment place? To start the journey and then claim LTA?
Can I travel with parents in one way and in return with my family? How can I claim LTA in this case?
Please advise
Is there any mandatory leave to be availed before claiming exemption? If yes, how many days of leave is mandatory to claim LTA?
Dear Sir,
If an employee travels by taxi from bangalore to mysore, mangalore, hassan annd back to bangalore how much tax exemption he will get? whether for entire tour or shortest route farthest point in this case Bangalore to Mangalore?
Regards
I have taken LTA ON sep 2014,when can I take my next LTA..can it be on oct 2015?? or jan 2016?
CIRCULAR 8/2013 DATED 10.10.2013 IS EFFECTIVE AFTER THAT DATE-
SUPREME COURT CASE IN 2009 SAYS NO CIRCULAR & EMPLOYER NOT LIABLE
IT IS MANDATORY TO KEEP ALL DOCUMENTARY PROOF
I was joined organisation in September 2013. My LTA Amount is Sep-13 To Dec-13 – Rs.4808. Jan-14 To Dec-14 – Rs.15000/- and Jan-15 to Dec-15 – Rs.15000/-.
Till date i am not claim any LTA amount.
My question is for which period (Year) amount tax free for me? Or for which year amount i will claim for tax exemption?
08/2013 circular issued by CBDT
Please read this CBDT very clearly state all your requirement for salary employee
https://taxguru.in/income-tax/tds-salary-financial-year-201314-ay-201415.html
@Akshita Jain
Yes you can c/f the balance LTC to the next block [this c/f will not affect your orginal LTC of current block]
@saurabh
Its just contract of ur employement, between you n ur company.
So its better to read your employment contract
@kishor
Actual expense or
LTC/LTA received or
Economy class fare (air journey) / 1st class AC Fare wher rail service avilable/ 1st class delux fare [via road if no rail link]
@Nayana
Family Meaning :
1.The spouse and children of Individual.
2.Parents,Brothers,sister of individual who are wholly or mainly dependent on Him.
Further it is not in power of employer who can check dependency status.
Employer is only required to collect evidence of actual journey
Cheers!
can a married daughter claim LTA of her parents and siblings saying they are dependent on her if yes, what a employer need to take from her that they all are depend on her
Hello Sir
I travel frequently (every month) from Chennai to Mumbai. Can I combine my total trip cost for the year and claim against my LTA amount. Do we have any facility to claim such LTA in the new Union Budget of 2015-16
Thank You
How many amount of LTA(From salary) exempted from income tax
Hi,
I have joined a new company in the month of Feb ’15, and the last employer adjusted / deducted LTA pro rata in final adjustment, and , the new employer has not given me the LTA amount declared in the Salary . THey say, i need to travel for minimum 5 days to get this amount.
Could you suggest me an option. Can i show my travel ( Air Tickets )before joining period to get claim or some other option?
sir,
what if i utilised my balance ltc in the next block and take one another ltc during the same block can my remainig one ltc be carried forward to the the next block?
Is there any LTA rule that I can not claim LTA for single route.
I did not claim for both way, i claimed only for onward journey. So, my claim got rejected with the reason that -“To claim LTA, it should have been a round trip”
It would be appreciated if you could clarify this at the earliest.
Dear Sir,
Is submitting proof of travel necessary for claiming LTA? Does the SuprememCourt ruling in the L&T case still stand? If I take LTA every year, will I be taxed every year for it? Please give me some clarification as my office is saying that whatever we do if we do not give proof of travel we will have to pay tax on LTA claims.
Thank you,
With regards,
Arindam Mukherjee
hi sir,plz tell me what rule less ltc amount in income exempt u/s 10.in ltc= i use ltc amount 40551/-in the month june 2014 by travel by taxi haryana to simla(h.p) & jan. 2015 hry to jaipur rajesthan.
which proof are smit for exempt u/s 10.
can I claim cost of gypsy used for safari in national park under LTA?
HI, I have following queries
I m working on overseas project deputation and coming for leave rotation period of 10days and apart from it I have taken 5 EL from my annual leave.
my query is can I claim LTA in first 10days if I travel within country and my EL is after completion of 10 days period excluding week ends.
if my claimable LTA Amount is 25000 and spend 15000INR on travel expense then I can claim it as NON TAXABLE so can I claim 10000INR remaining out of 25000INR as TAXABLE at end of year 2015
In the 4 year block of 2010-13, I have claimed LTA once in July 2010 and not utilised the second LTA. Hence in next 4 year block i.e. 2014-17 in Oct 2014, I have claimed the unutilised LTA of preceding block. Now in Feb’15 can I claim LTA of the current block of 2014-17. My doubt is because both LTA claim i.e. of Oct. 14 and of Feb’15 are in the same financial year. Can I claim LTA twice in a financial year.
I have claimed LTA for year 2013-2014 which is Rs.26250 without submitting the bills. This amount which is already deposited in my account bt can you tell me how much percent of tax will be deducted for this amount.
I am travelling to get my family from Mumbai. So I am traveling alone on Feb 13 and on Feb 15 back along with my family. So can I claim LTA?
Also does it make any difference as All my income tax has been deducted so far in the year 2014-2015. If so can I claim this LTA in April which is still within 90 days of travel.
I have one query.
I am eligible rs. 56,000/- every year from 01.01.2014.
I traveled in May.’14 and exp. was 56000/- I claimed exemption Rs. 30,000/-, now with same bills rest of rs. 20,000/- I want to claim in Feb.15. is it possible????
is it required to take 5 days leave to get LTA Exemption.
AS per Rule 2(b), Dependent parents, brothers & sisters of the assessee are also included in meaning of family.
Why don’t people get it.
Exemption for family means only wife and two children.
Your parent’s tickets are not allowed to be exempted.
Regards.
hii i have this query:
Can dependent parents do a separate/different trip and we can still claim?
I have one query.
I am eligible rs. 30,000/- every year from 01.01.2014.
I traveled in dec.’14 and exp. was 50000/- I claimed exemption Rs. 30,000/-, now with same bills rest of rs. 20,000/- I want to claim in dec.15. is it possible????
Dearsir
I wil be travellng with myfamily see most of the places in north we are going to hire car from Mumbai if I will submit a bill from car owner can I claim for my LTA
your below mentioned point is contradictory:
Can I Claim LTA Twice in a Year:- Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other in case your spouse is also working.
BECAUSE LAW SAYS TWO JOURNEY IN 4 YEAR BLOCK & IT CAN BE DONE IN ONE YEAR ALSO.
I travelled in April 2012, and had booked tickets in March 2012. I submitted proofs subsequently so that LTA exemption can be claimed in 2012-2013, asking company not to deduct taxes. Company said, that LTA cannot be claimed in ANY financial year in this case, as the tickets were booked in 2011-2012 and travel happened in 2012-2013. because a) LTA cannot be claimed unless the actual travel takes place hence not eligible for 2011-2012 b) As the money was spent from income of 2011-2012 exemption cant be claimed in 2012-2013.
Is this a valid interpretation of the law?
For the LTA is it a mandatory requirement that the person claiming the LTA should paid for the tickets. Or is it allowed that the ticket amount is paid by wife’s account and husband can claim it in his office.
I have a query for my Himachal tour, a round-trip (mumbai > amritsar > dalhousie > dharamshala > chandigarh > mumbai), we all know Himachal don’t have rail transport, so we reached Amritsar by train and hired a cab @20,000/- for entire tour till chandigarh airport.
Now, we all know himachal does’t have rail connectivity to above hill stations and as per LTA’s below rule, we cannot claim for car expense. I have traveled via train from Mumbai > Amritsar and Chandigarh > Mumbai via air.
So, can you help me advice so that I can claim maximum as per LTA laws, my total travel expense was 35,0000/-
LTA rule,
“Place of origin& destination not connected by rail(partly/fully) and not connected by other recognised Public transport system also – AC first class rail fare by shortest route (as the journey had been performed by rail) or the amount actually spent ,which ever is less – See more at: https://taxguru.in/income-tax/taxability-of-leave-travel-allowance-lta-and-relevant-aspects-to-keep-in-mind.html#sthash.wl9LhKHv.dpuf“
Are air ticket charges of Jet Airways reckoned in ltc bill if Jet Airways Flight is missed due to rescheduling/very late arrival of Air India flight?
Hi
I am working with a very renowned organisation in Delhi. Me alongwith few of my colleagues had claimed the LTA for the last 3 times. Certainly HR team noticed that LTA word is not written in our appointment letters though we all were told prior to our recruitment that it will be part of our CTC. Somehow we also missed to check our appointment letter prior to joining. One of my colleague has a mail in which CTC breakup is clearly written and LTA is also there as part of CTC. We have the minutes of the meeting(HR Committee) in which approval was given for our recruitment and our agreed CTC is clearly mentioned in those minutes.
Now management has given instruction to recover the paid amount of LTA from us. Is it genuine ?? can they do like this ?? How strong our case is ?? Please help. LTA is recovered from our monthly salary.
Awaiting your soonest reply
thanks & regards
Sir,
I would like to know if LTA is not claimed, will it be paid by Employer by deducting the tax? Or do we need to forget the amount if not claimed?
Hello,
I travelled from Bangalore to Bangkok ( and back ) for my leave. The ticket raised by Indigo had a single PNR number and a total invoice value. However, it was basically two flights – one from bangalore to calcutta and the other from calcutta to bangkok and I was given two seperate boarding passes. But indigo is refusing me to provide a billing breakup for the bangalore to calcutta flight, hence I cannot claim the tax exemption. Please suggest.
hi, my father is a govt employee with delhi govt. I booked air india tickets for him thorugh make my trip.com.
Now when my father submitted the documents for LTA claim in his office, they are saying that you have to book the tickets only through Air India website, and not through any other site. So on this basis, they have rejected my father’s LTA claim. I want to know if there is any such clause? Are they right in rejecting the LTA? If not, what is the other option through which the LTA can be claimed for the said journey.
MY LTA RS. 55569 WHICH AMOUNT CLAIM EXEMPTION. AY-2013-14
LIMIT OF EXEMPTION
I retired on 31/03/2013.
My employer paid LTA amount in April 2013 for the bill submitted In March 2013, for the journey in March,2013 while in service.
In the TDS form 16 for 2013-14, the employer did not mention this amount along with pension paid by him.
The amount pertains to 2012-13, but paid in 2013-14 and not mentioned in both the TDS forms.
The amount appears in my bank pass book Of April 2014.
Whether I have to show in ITR for 2014-15 or not,without my employer showing it,.
Pl.guide
Hello Sir ,
Inspite of giving all travel related proofs ( air tkt , train tkt etc ) , my employer put the entire LTA amount as taxable and tax got deducted as seen in my Form16.
Now , while filing return online from incometaxindiaefiling.gov.in website , how do I claim for LTA tax exemption ?
Is there a field where I can mention this claim and what are details of this field ?
Please respond asap.
Kind Regards ..
Sandeep Kulkarni
I & my wife started from Pune to Delhi together by train whereas my father & my mother started from Nagpur to Delhi by a different train.Then we carried out the rest of the trip together to Shimla/Manali.On the return trip ,I & my wife once again came back to Pune from Delhi on one train while my parents travelled from Delhi to Nagpur on different train.My question is that can I consider there(my parents) journey tickets in my LTA claim.
My company has a policy as follows, wanted to know if this is legally correct. 1. LTA can be claimed only if you gone on travel on 3 consecutive paid/earned leaves. So if I go on a leave on Fri to Monday with 2 days as weekends and 2 days of paid leave. As per policy I am not eligible to claim LTA for tax savings. 2. LTA can be claimed only on Earned Leave and not on any other leaves like Casual Leaves of Holidays. Request your help to understand the same.
I have travelled by air (economy class – Rs 14000) from Pune to Banglore and then from Banglore took a car to travel Mysore, Ooty and Tirupati costing Rs 60,000. Can I claim LTA on both Air and Car travel i.e (14000+60000=74000) or I can cliam on any one of them.
My LTA limit is around 1,20,000.
My travel date was in December 2013. However, I claimed the LTA in early 2014 for the travel in December. My company has mentioned that as per their policy – the LTA that I claimed would consume from my 2014 – 2017 block instead of 2010 – 2013 block since LTA consumption is based on “claim date” and not “travel date”. However, I believe that LTA is based on travel date and not claim date. Request you to let me know what is the correct understanding and which clock the December 2013 travel should consume?