Understanding LTA Exemption: Can You Claim Twice in a 4-Year Block?

Dear Seniors,

Query on LTA Exemption Under IT Act

As per the IT Act, LTA is exempted two times in a block of four years. However, many employees carry forward LTA and claim it twice within a 4-year block to avail of IT exemption two times, which is effectively equivalent to claiming exemption for four years. Is this the correct method?

Based on my understanding, I believe that the LTA amount can be claimed by combining two years together, but IT exemption should only be claimed for one year of LTA. Could you please clarify this?

Thank you

LTA Exemption in a 4-Year Block

LTA exemption can be claimed by clubbing two years and two times in a block of four years.

Regards,
Pon

LTA Claim

There are predetermined blocks of four calendar years; the first block began in 1986 and ended in 1989, the next block was from 1990 to 1993, and so on. You can claim an exemption for up to two journeys in a block of four calendar years. The current block is from 2010 to 2013.

If you are not able to make a claim in a block, there is a carry-forward facility available. You can carry forward one journey, but only in the first calendar year of the next block of four years. In such a case, in the next block, you can claim three LTA exemptions in total.

Dear Vijaya,

Understanding LTA Exemption in a 4-Year Block

LTA claims get exempted twice in a block of four years. For example, considering the block as calendar years 2010, 2011, 2012, and 2013, LTA for 2010 and 2011 claimed in 2011, and LTA for 2012 and 2013 claimed in 2013 is exempted from tax. In other words, LTA claimed in such a manner for all the four calendar years referred to above gets exempted.

However, if the LTA is claimed every calendar year, then the LTA claimed for 2010 and 2011 alone is exempted, and the LTA claimed for 2012 and 2013 is taxed. This is because the first two claims (2010 and 2011) are considered as having been claimed twice in the block, and the third and fourth claims are taxed.

The important fact is that in any case, the employee needs to furnish proof of having undertaken the travel during the period he was on LTA leave. Claims relating to boarding and lodging cannot be considered for exemption.

Trust the matter is clear.

Regards,
M.V. Kannan

Please understand it is two journeys and not two years to claim exemption. In such a case, you are claiming for two times only by clubbing years. This is an accepted norm.