Conveyance Allowance & LTA

Please give the deatils of
1. How to claim LTA
2.How to claim conveyence allowance
with procedures as per income tax rules

Hi Vijaykumar,

LEAVE TRAVEL CONCESSION

WHAT ARE THE LIMITS OF EXEMPTION IN L.T.C. is granted to an employee in connection with the journey on leave by him or his family. It is exempt from income tax within certain limits as under : -

(a) Where journey is performed by rail; railway-fare in Second AC class by shortest route to destination.

(b) Where places of origin and destination are connected by rail but the journey is performed by any other mode then Second AC class fare by shortest route to the place of destination.

(c) Where place of origin of journey and destination, or part thereof, are not connected by rail and journey is performed by any other transport; then

(i) If a recognised public transport system exists between such places the first class or deluxe class fare of such transport by shortest route, or,

(ii) If in other case, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.

Exemption will, in no case exceed actual expenditure incurred in the performance of journey.

Leave Travel Concession Rules have been amended on the recommendation of the Fifth Pay Commission to extend the facility of travel by air economy Y- Class to certain categories of employees of the Central Government with effect from 1st October, 1997.

Consequently, where the journey is performed on or after 1st 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.

Also, where the entitlement was previously for air-conditioned Second Class Rail fare, it has been upgraded to air-conditioned First Class Rail fare. [l.T. (First Amendment) Rules 1998, O.O.I. Gazette Notification No. S.O. 34(E) dt.

12th Jan. 1998; CBDTF.No. 142/85/97-TPL No. 105021].



WILL THIS CHANGE APPLY ONLY TO GOVERNMENT EMPLOYEES OR DOES IT APPLY ALSO TO EMPLOYEES OF OTHER SECTORS ?

The change applies to all employees.



HOW MANY TIMES CAN EXEMPTION BE CLAIMED ?

The assessee can claim exemption in respect of two such journey(s) in a block of 4 years. For this purpose, the first block of 4 years was calendar year 1986-89. For a block of 4 years, the journey performed in the first year following that block year is also eligible for exemption. Also, such journey will not be taken into account for determining the tax exemption for the succeeding block.



TO QUALIFY FOR EXEMPTION IS IT NECESSARY TO PERFORM ACTUAL JOURNEY ?

Yes, certainty. In case the L.T.C. is encashed without actually performing the journey the entire amount received by the employee would be taxed in his hands.

WHAT IS THE DEFINITION OF FAMILY FOR THIS PURPOSE?

For this purpose "family" 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.

Conveyance allowance : It is exempted from Tax if it doesn't exceed Rs 800 per month viz Rs 9600 p.a.

Regards,

Rajat

Hi,
One more input. Where the employee gets car facility, conveyance exemption cannot be given to him and where he is physically handicapped, the exemption can go up to Rs.1600/- p.m. or the actual allowance received whichever is less.
Thanks
Hema

if the employee's family go alon(without employee) for a tour, can the employee claim LTC?

LTC can be extended to the family members of an employee seperately. this can be treated as a seperate entity while availing such facility. however, the admissibility criteria should be as per the policy of the organisation. That means, there should be some clear defenition about the term 'family member', dependents, etc.
Ajay

Hi,
Need to know some details about LTA. Does it require the employee to take some minimum number of leaves?
Would really appreciate a quick reply!
Regards,
Deepti

Hi Deepti,
No there are no minimum number of leaves as per law. You can claim LTA for any number of leaves. Of course, to claim exemption you have to actually undertake travel and submit the bills.
Regards,
Devjit

Hi All,
I have a further query. My CTC includes a certain amount as LTA, but we are paid the actual money every alternate year. I think this is wrong...? As far as I am aware, the concept of alternate years applies to the TAX EXEMPTION, not actual entitlement. It means an employee is supposed to get the LTA amount every year, but he can claim exemption 2 times in a block of 4 years, usually in alternate years.
Pls clarify/confirm this.
Regards,
Devjit

Thank you so much for your reply Devjit.
Regarding your query, you may check the following link:
http://in.rediff.com/getahead/2006/jul/11lta.htm
As per this article - "If LTA is not utilised, it gets added to the entire salary. And then you are taxed on it."
Regards,
Deepti

I have one more query
For females i believe there is no tax deductions upto CTC 1.5L. Is it possible to claim the whole of LTA or Medical Reimbursement with out any proper bills or travelling??. Is it subjected to tax??