Understanding Leave Travel Allowance (LTA) and Income Tax Implications

Hi Friends,

I have a few queries, please.

1. LTA is part of Choice Pay wherein all the bills need to be submitted. What happens if the relevant bills are not submitted? Would the amount be taxed?

2. Under LTA, will parents who are dependents be eligible? Would their travel expenses come under LTA?

3. How do I calculate the income tax on the salary?

4. Superannuation Fund: Is the percentage per month or per year?

Thanks in advance for all the help.

Uma.

Hi Uma,

Please share your personal email id with me. I will send you the income tax calculator and LTA policy that will clear all your doubts.

Subhash Chandra
Manager HR
Delhi Region

Hi,

Got this from a site. Hope it's useful.

To claim LTA, you need to fulfill two criteria:

i. You should have taken leave from your company.
ii. You should actually travel.

You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.

How often can I claim LTA?
Twice in a block of four calendar years. This block is not calculated from the start of your employment; the government defines these blocks. Presently, the block is 2002-2005, meaning January 1, 2002, to December 31, 2005.

What if I fail to avail of it?
In case you fail to claim LTA, there is a carryover option. If you never claimed any LTA in the previous block of four years, you can do so in the first year of the next block.

What is the proof of travel to avail of LTA?
According to rule 2B, you can produce an air, rail, or any public transport ticket. You can also submit bills from a car rental company if you rent a vehicle. However, travel must be within India, not abroad.

Is LTA taxed?
You can receive LTA as either reimbursement or allowance. In the case of reimbursement, LTA is not taxable. If you receive an LTA of Rs 50,000 and produce proof of travel worth Rs 10,000, you can claim only Rs 10,000 as LTA, which will be tax-exempt. If you receive LTA as an allowance without proof of travel, you will pay tax on the amount not supported by proof.

LTA is not a fringe benefit; it is specific to individual employees.

Can both spouses claim LTA?
If both spouses are entitled to LTA benefits from their respective places of work, they can claim exemption on LTA and enjoy the benefit for four journeys in a block.

If I and my wife travel this year, can we both claim LTA simultaneously?
No, you cannot claim LTA twice for the same journey.

If I am entitled to a particular amount as LTA but my expenses are higher, can I claim more?
In such a case, you can only claim exemption up to the entitled amount.

Thanks,
Fayeg

Dear HR Friends,

I am conducting a small assignment to gather information on how LTA (Leave Travel Allowance) is paid in organizations. Please share details about your company's LTA payment practices, including your company name and your name. The specific questions are as follows:

1) Is LTA paid upfront, i.e., in advance?
2) If not, how is LTA paid?
3) Is there any recovery process involved?
4) Is LTA paid on a prorata basis or in full if an employee joins in the middle of the month?

Your input will be greatly appreciated. Thank you for your time and assistance.

Best regards,
[Your Name]

Hi Subhash,

I need some clarification about LTA. How will I calculate LTA? For which employees is LTA applicable? Is there any particular formula for LTA? Please do send me the details to my email: hr.sivakumari@gmail.com.

Regards,
Siva

Hi there,

I assume you are also looking for information on LTA. Could you please tell me about its origin in India and the history of LTA? Is it mandatory for private firms, and under which act does it fall?

Thanks.

If LTA is paid at the end of the year, how is it possible for an employee to claim tax since he has not received that amount?

Hi,

I have a straightforward question. I joined my company in July 2005. For the period of July to December 2005, I was entitled to receive LTA of Rs. 3,000 (Rs. 500 each month). I forgot to claim it for any journeys. Now, in any case, I cannot claim it for any journeys. Can I still get the money after tax deduction, or is it forfeited?

Thanks in advance,
Basavesh

Hi Members,

Even after the Supreme Court judgment on the matter, companies are demanding proof of travel. The company representative says there is no circular regarding LTA by CBDT. Please help since the financial year is closing soon!

Regards,
Hemant

Hello, I am an intern. I have been asked to calculate the LTA for employees for four years, but I don't understand how to calculate it. There are some pro-rata calculations involved as well. Kindly please help. I have asked my company guide, but I am unable to understand it.

Hi Uma,

If you do not submit bills, your employer may or may not grant you the tax exemption. Yes, dependent parents are eligible for LTA. I found similar LTA FAQs answered in this article - [Top 10 Leave Travel Allowance (LTA) Exemption FAQ](http://www.investmentyogi.com/top-10-lta-exemption-faqs/).

Thank you.