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.
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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
Ihave availed only once the LTA facilities very early in the services i have joined. i am going to retire on Jan 2025. how LTA can I avail
many
What are the rules ifCEO , Director or owner of comcpany is travelling ?
I traveled 22 Dec 2017 to 29 Dec 2017 , Travel LTA block comes ending December 2017 , company paid me as LTA in JAN 2018 , now company HR not allowed me LTA benefit as LTA paid in Jan2018 with below Remark “If the LTA amount is taken in Jan – Mar 2018 , then the same will be taxed in FY 2017-18. If you have travelled in the same period it will be exempted.”
HR Says LTA paid in Jan 2018 , it comes in new Block
please provide you Expert Comment on this .
Sandeep Sir,
Thanks for your efforts to guide individual for their specific quarry.
Sir, I have taken one TAXI TRIP from Delhi-Kota-Hardwar-Delhi, Wherein Delhi is my origin place of work/residence.
Kindly guide, whether I am entitled to claim LTA through Taxi while I have booked it from OLA and also got ONLINE RECEIPT of it.
Regards
Amit Gupta
09313 4444 36
I have not opted for LTA in my company for 2017-18. But I just completed one trip of 5 days with my family in February 1st week 2018.
How can I claim this under LTA; whether there is possibility of claiming this trip in my next year LTA.
Hi,
I was on earned leave(2) + LWP(3) = 5 days during my travel.Can i claim LTA for this trip?
I visited last october Shimla manali Rohtang pass. All things are booked thru Travel Agent having PAN and GST no. Bill of Travel Agent bifurcated Hotel and Transportation cost separately. Whether i can claim Transportation cost in my LTA Claim ?
I booked flight ticket in a group with my friends.Amount shows the combined amount for everyone.How can I claim LTA exemption only for me?
Hi,
Wanted to know the rules on crediting LTA with Salary. many companies credit it on monthly basis and many argue that it should be annually. So Can you help me with the ruling or Act clause no. that mentions that LTA can be credited on monthly basis too.
Thanks,
Mayank
I will be travelling in January 2018, can I claim LTA tax exemption in FY 2017-2018
Can an employee claim his LTA with two different mode of travel bills? eg. Flight ticket+ Cab bills. Please clarify
I have retired on 30.09.2016. Availed LTC in March 2017 for the family comprising, self, spouse & son (dependant at that point). Whether I can claim exemption under sec10(5) of the IT act. Further, I have not claimed any relief in 2014-17, although performed journey in north-east. As a retired employee, whether I have to submit documents to employer or I have to claim refund from IT authority while filling return.
Hi, I have travelled in Dec 2016, can I claim LTA in Fiscal year 2017-2018 ?
how many days leave to be applied for claiming the lta benefits.
In the year 2015-16 I got LTA as advance.
Travelled with family in Nov.15 but not claimed for exemption
This year for this block I was entitled to claim second travel of block but due to new guideline employer is denying and deducting tax for both i.e. advance as well as this year amount
what should I do
Is there any specific restriction on LTA when claiming it for Air travel? Like the journey should be a round trip (single PNR), or it cannot be a zig-zag travel (different PNRs)? Reason I ask is because in 2016 I travel from Bangalore to Ahmedabad which was a connecting flight from Mumbai (single PNR GoAir airline) and while coming to Bangalore, I had different airline (Indigo) and had a stop-over in Mumbai for some hours. So in my entire Bangalore-Ahmedabad-Bangalore journey, I had 3 PNRs – one from Bangalore to Ahmedabad, one from Ahmedabad to Mumbai and third from Mumbai to Bangalore. In this case, can I claim this entire journey as one LTA?
Hi
I have joined in a new company on 03.05.2016. my travel date is 21.04.2016 to 27.04.2016. Spent Rs.25,650/- on Air ticket.
Till 30th of April’16 I was working with another company & I had no LTA component in my CTC.
Will I be eligible for claim of LTA exemtion for the Year 206-17 for Rs.23513/-with New company.My CTC in new company has LTA component.
Hi, I have traveled by air in January 2016, Can I claim LTA for this financial year i.e for Apr’16 to march’17?
What will be my eligibility? can I claim for 2 years amount together i.e.LTA of FY 15-16 + LTA of FY16-17 added together?
I need a clarification on LTA . I stay in gurgaon & had travelled by Taxi to Manali to Amritsar to Shimla & Back . For this I claimed an amount of Rs 39000/- as a Taxi Bill . My employer has only given me a benefit of 12348/- stating that only shortest trip by Rial to manali is payable . Please advice
Hi,
I have claimed LTC in month of June-16 worth Rs. 20,000 But I had represented bills of Rs. 28,000 & received Rs. 20,000 in my account. Now in month of October, my salary got revised & my eligibility got increased by 8,000.
I want to get benefits of the same trip (previously claimed in June). How can I do that because as per my company I can claim only once in a year for a single trip.
Please suggest.
Get your LTA Bill and Medical Bill to save tax from ltabillmedicalbill.com or send an email to ltanmedicalbill@gmail.com
Hi,
Please help me about my below quiries
1. Is it mendatory to submitt Boarding pass with the flight ticket to show documents for LTA?
2. the amount for LTA is 30000 for two years.So is it neccessary that this should be in one travel only or we can submit more than one travelling tickets(Flight and train) which will be the sum(30000) of all travelling during two years?
Fresh government recruits are entitled to 1 LTC a year during their first 8 years of service. In such cases are the third and the fourth LTC in the block of four years taxable?
Hi ,
the LTA deducted by my employer is 9000 per month … what is the maximum i could claim it
I have not taken LTA from 2012-13 till Oct-2016 (Yearly Entitlement 0.35 lakhs till 15-16 & then 0.45 Lakhs. Total Entitlement balance 1.84 Lakhs). In Oct-2016, I have claimed with Travel Fare (0.47 Lakhs) by AIR & Taxi Fare (0.65 Lakhs). Company paid me entire 1.84 lakhs but have allowed only 0.47 lakhs as exempted & balance as taxable and deducted tax on 1.38 Lakhs. Please advise whether this is correct.,
Hi,
I travelled from Mumbai-Sawaimadhpore-Jaipur-Jodgpur-Jaiselmer -Mumbai, can I claim all travel expenses relates to train fare ?
I had traveled on SUNDAY-05/22/2016.
But my leave have started from 05/23/2016 (Monday) and End Date: 05/27/2016 (Friday).
Please let me know, I am eligible for LTA claim?
AVAIL LTA WITH IN INDIA IN NOVEMBER 2016, TOTAL TRANSPORT EXPENSE IS 45000/-, EMPLOYER REIMBUERSE RS 29000/- AS AN INDIVIDUAL ASSESSEE HOW IT IS BENEFICIAL TO ME.
Hi
I had joined one organization on May’14 and applied one LTA of 70 K i.e. 35 K *2 years.
And consequently in Apr’16 I took LTA money of 35 K with tax deductions. The interested thing is that when I left organization on Oct’16 then company has taken entire 35 K in final settlement. Please guide me whether I can get at least 6months LTA or not ?
I took vacation from 1st Sep till 5th Sep. Last 3 days ( 3, 4 & 5 Sep) are public holidays and I applied leave for 2 days (1st Sep & 2nd Sep) only. Can I claim this expense under LTA?
IF COMPANY PROVIDE LTA AS A PART OF SALARY THEN HOW CAN I CLAIM EXEMPTION.
I have LTA as a part of my salary. I have taken privilege leave on 1st week of oct – 3rd to 7th oct 2016. Now I have booked economy class air tickets for date 2nd oct and return on date 9th oct 2016 since I want to utilize the weekend clubbed before and after my privilege leave.
My question – Now the air ticket is on weekend before my Privilege leave and return air ticket is after my Privilege leave and it is also on weekend.
Can I get LTA for weekends (Sat/Sun) as my office is closed on weekends?
i have not claimed LTA for last 10 years. can i now claim it.
My family planned for trip on weekdays(3 days) by our own vehicle. How can I claim LTA. Do I need apply leave as LTA or GL/EL. And how can I claim my travel exception(Fuel Bills). What and all I can claim on this trip.
Does this mean if i travel by air and claim LTA .. my travel cost will be refunded back to my account ?
Your article provides a lot of good information in a easy to digest form. That’s wonderful. I have few queries as follows which I think are not covered above.
1. Train journeys of all classes are covered
My confusion –
A. Can I claim it against tourist packages from IRCTC? If YES, full value of package or part of that?
B. Can I claim it against Maharaja Express, high end tourist train packages from IRCTC ? If YES, full value of package or part of that?
C. Air journey for economy class from any company (Air India and all private airlines) are covered, is that correct?
2. If I go to a tour with my own vehicle for a location where train service is available, can I claim fully or part of that travel cost? If a claim is allowed, what proofs are required ?
we i travel by car and taken LTA leave. Fuel slips will be considered or not while claiming LTA exemption from income tax
regards
surinder
Hi sir,
The article is quite informative and useful. However, I got some doubts, and I think you would be the right person to address them.
1. I took 5 days leaves 3 times (total 15 days paid leave) in 2015 and went for travel. If I want to claim LTA benefit for AY 2016-17, Can I claim travel expense incurred in all 3 journeys or is that restricted to only 1 journey?
2. My mother is getting pension income of 15000/- pm but that is consumed by loan EMIs. Can I claim she is mainly dependent on me and claim her share of travel expense as well?
3. One of my travel started on 28th December and ended on 2nd January. If I have only 1 year left in current block, Can I claim the return ticket of 2nd January since it is related to the journey commenced on 2015?
4. Once during last year, When I was on paid leaves, my family traveled but I could not accompany them. Can I claim their (portion of my ‘mainly’ dependent parent) travel expense under LTA? (Reason for this specific query is because this is the only travel done through air, else all were road travels.)
Thanks in advance.
Ojas.
I’ve joined my organization in April’15, prior to which i was studying in a college. I had booked travel tickets for Mar’15. Please let me know if i would be able claim LTA for the same.
I haven’t declared the LTA to the organisation but want to claim the amount at the time of Filing the income tax return.
What is the procedure or under which section should i mention it in e-Filing site.
Hi, i have recently joined in an organization from Jan 16, i am covered in block of 2014-2017 so now can i clam the LTA twice in 2016 & 2017 resp.?or i can claim only once in this 2 years? I have not claimed any LTA in my previous organization. Kindly guide me
hello, i want to travel from Delhi to Leh in June and want to avail LTA, when i see air fares those are very high and i want to travel through private cab which is cheaper, can i still get lat benefit if travel by taxi? also there is no trains directly to leh so cant have shortest route fare on train for comparison
Hi,
i want to go to Leh in J& K using my own car, Leh is connected by air. my employer quoting rule Rule 2B read with Section-10(5) of Income Tax Act, 1961 says using own car is not permissible. i am ready for any proof of journey like fuel bills enroute toll tax slips etc.
is the journey allowed by own car?? if yes under which rule?
Hi,
I have two questions related to this topic
1. Is there any restriction on no. of days leaves to be availed to claim LTA (means whether i’ll eligible for LTA exemption if i availed leave of two days only)
2. During these two days of leave if I travel by my own car then whether i’ll be eligible for LTA exemption for an amount equivalent to first class train fair with shortest route.
Hi, according to your article I understand that cost incurred for two journeys in the block of four year can be claimed as exemption and one cannot not claim both the journeys in one year. I dint find any provision in IT Act or Rules which restrict employee from claiming exemption of two journeys in one year. Can you please refer me the rule or section which restrict the exemption to one journey in one year?
Hi,
I traveled by Innova from Bangalore to Delhi for 4 days with my family members like my wife, my kids and my parents, It costs me around Rs.80000 + Toll + service tax. In that 4 days i took 1 day as leave. I am eligible for 120000 per annum. Am i eligible for LTA exemption for the whole amount of Rs.80000 + Toll + service tax
Hi, I am getting 10000 as a LTA component. I have not claim LTA for 2014 & 2015. Now in year 2016, I want to claim the LTA with my journey. Please advice can I take benefit of tax exemption of Rs 30000( which I have not claimed from 2014-2016).
Regards,
Dipender
I have my LTA 20000/annum.I have not availed any LTA for block period of 2013-17.Shall I avail LTA in 2016-17 & 2017-18.Is it possible to avail LTA amounting 60000RS in 2016 equal to LTA of last 3 years.
I wish to claim LTA FBP benefit this FY (2016-2017) for my travel that I have done in December 2015. In FY2015-2016, I didn’t declared LTA and I received the amount after tax deduction each month.
Please help me understand if it’s possible for me to declare LTA this financial year and submit my travel proofs dated Dec 2015? I am eligible for 60,000 and have flight tickets worth Rs. 54,000.
Hi, I had travelled in 2014 as well as 2015. I have both journey’s tickets. Now when I ask my company’s finance people, they say that you cannot claim for any previous years. Now you have to travel in 2016/2017 to claim the new ones only. What I knew already is that we should be able to claim twice in a block of 4 years (2014-17) as per Govt policies. So I should be able to submit one journey ticket of 2014 or 2015 (anyone of them) and anyone from coming two years. Please guide me how can I do that. Since my company finance people are not helpful in giving correct information about this. I also have a query about my medical bills. Since my company people accept it monthly wise/quarterly wise. I could not submit for Jan, Feb, Mar 2015. So my tax has got deducted. Can I claim the bills with ITR? Please suggest me for this problem. Thank you for your help.