Rajiv505
Chartered Accountant
Saurav1314
Payroll,hr-shared Service
SUNEELKMASUR
Salaried
Harsha Shetty
Manager Hr
+5 Others

Hi All up to what limit the LTA is exempted under I.T. ( e.g. in Rupees ) suppose if one person basis is 45000/- then and his LTA is yearly 90000/- then is it allowed by I.T. Raj
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As per my knowledge, the LTA is exempted upto Rs. 15000/- per year i.e. Rs. 1250/- per month and is also deemed non- taxable for 2 times in a 4 years. thanks and regards,
Dear Raj,
LTA (Leave against Travel) has no limit as per Income tax law under section 10 (5) rule (2b). Any person can avail this facility two times in the block of 4 years. Current block is 2010 - 13. There are specific rules need to be followed to get the benefit.
Travel should be performed by the employee or employee and his family together.
Family means spouse, children, dependent Parents brothers & sisters.
Leave for minimum of 3 working days to be taken.
LTA Claim should be approved by HR - (Leave confirmation)
The opted amount will be withhold from monthly salary & reimbursed on submission of bills.
Exemption is available in respect of travel to any one place within India by the shortest route
Exemption is available only towards travel fare and does not include any other expense.
regards
suneel.
In fact, if we look precisely, LTA is leave travel allowance and it is fully taxable under Income Tax Act as it is a fixed allowance.
However, LTC is exempt u/s 10(5). there are plenty of rules & conditions prescribed to avail such exemption as described above by Suneel.
But I have never come across any specific limit of exemption for LTC as stated above by some members. I believe it is tax free upto the amount actually spent by employee with proofs submitted (subject to other conditions fulfillment)
Rajiv
Hi all,
LTA leave travel allowance is a perk that is given by the company to an employee and this is usually taken at the end of the year usually Dec. This facility is available to the employee and his family members i.e, spouse and children. All expenses pertaining to this are taken care of the company subject to the limit and the employee producing proof of expense.
As per my knowledge, this would be treated as a perk and taxable.
Please correct me if wrong.
Tks Raj
LTA is Local Travel Allowance .
LTC is Leave Travel Concession.
If you mean something else by acronym LTA please clarify.
If you mean Leave Travel Allowance [ or Leave Travel Concession ] , then income tax exemption is limited to Air Economy or AC1 to the shortest route subject to submission of documentary evidence and number of family members eligible etc etc.. There is no restriction on amount which can be paid under this head. Amount paid minus actual spent on traveling ticket is taxable as per the slab. This concession is allowed twice in a block of four years.
If you mean Local Travel Allowance , then daily rate of Rs 50.00 of actual attendance is exempt. The latest daily rate value needs rechecking .
Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt.

Exemption of Fare Only - 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. Travel has to be undertaken within India and overseas destinations are not covered for exemption.

Exemption on Actual 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.

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. Further, 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.

Amount Exempted

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 - 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.
Dear Premendra,
LTA (Leave against Travel) has no limit as per Income tax law under section 10 (5) rule (2b). Any person can avail this facility two times in the block of 4 years. Current block is 2010 - 13. There are specific rules need to be followed to get the benefit.
Travel should be performed by the employee or his family together. Family means spouse, children, dependent Parents brothers & sisters.
Leave for minimum of 3 working days to be taken.
Exemption is available in respect of travel to any one place within India or abroad on producing the original bills on Travel. If you travel by Air you need to produce ticket as well as boarding pass of traveler, If you travel by car you need to produce original bill, Trip sheet, Toll gate tickets (in originals). But LTA will be calculated only shortest rout as well as 3 tier train rates.
It is benefit the employee only in terms of saving some amount of income tax
Regards
Harsha
i think some people are getting confused with Medical Reimbursement and LTA.
For Medical Reimbursement limit is of 15kpa but for LTA there is no limit or it can be fixed amount(eg: 2 months basic salary*12 per annum) given by employer and ultimately part of your CTC breakup.. Correct me if I am wrong...
Dear Harsha,

Proof of travel

Recently 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 .



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

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