Understanding LTA Policy: Taxable Parts and Carrying Forward to the Next Block?

Hi, I have to make an LTA Policy. I need to know what part of it is taxable. Also, it is claimed twice in a block of 4 years, so can that be two consecutive years? 🙄 Can LTA be carried forward to the next block of 4 years?

Hi Preeti,

LTA slab fixation varies among different companies. For example, in my company, the LTA slab is fixed at 75,000. If any employee has opted for the LTA allowance (In my company, 75K is the maximum limit he can opt for), assume he opted for 50K on an annual basis. If he is able to produce bills worth 50K, then he is not taxed. In another scenario, if he produces bills worth only 10K, the balance of 40K will be taxed and paid to him at the end of the financial year.

Furthermore, the LTA is carried forward in the next 4-year block and can be claimed twice within a block of four years.

Cheers,
Nikita

Hi,

Exemption is based on the actual expenditure and is strictly restricted to the actual fare incurred for journeys performed within India by air/bus/rail. The qualifying amount will be based on the shortest route.

If an assessee has not availed LTC/A during any of the specified 4-year block periods on one of the two permitted occasions, an exemption can be claimed in the first calendar year of the next block. In this case, the exemption utilized will not be counted for the purposes of claiming future exemptions allowed in subsequent blocks of four years.

Praveen Garg

Thanks,

I think I get it, but one more question. Actually, I don't know where I got this from, but I heard that you cannot claim LTA in two consecutive years and it has to be claimed in alternate years even in a block of 4 years. Is that correct?

Regards,
Preeti