Leave Travel Allowance (LTA) Exemption & Rules | H&R Block

Leave Travel Allowance (LTA) Exemption & Rules

Taxability of Perquisites – Accommodation Provided by Employer
November 10, 2014
Taxability of Gratuity for Private Sector Employees Not Covered Under Gratuity Act.
November 12, 2014
Show all

Leave Travel Allowance (LTA) Exemption & Rules

Employer gives Leave Travel Allowance to their employees for travelling expenditure in India. Leave Travel Allowance paid by employer is exempt two times in a block four years period. This exemption can be claimed once in period of two years. Following points must be considered while calculating tax exemption amount on Leave Travel Allowance.

  • Journey by Air: Economy Class Air Fare of national carrier by the shortest route or the actual amount spent, whichever is less, is exempt from tax.
  • Journey by Rail: Air Conditioned First Class Rail Fare by the shortest route or the actual amount spent, whichever is less, is exempt from tax.
  • Where the destination and origin are covered by Rail and journey is performed by any other mode of transport then Air Conditioned First Class Rail Fare by the shortest route or actual amount spent, whichever is less, is exempt from tax.
  • Where place of origin of the journey and the destination is not connected by Rail, the tax exemption depends on the following:
  • Where recognized public transport exists: First Class or Deluxe Class Fare by the shortest route or actual amount spend, whichever is less is exempt from tax.
  • Where no recognized public transport exists: Air Conditioned First Class Rail Fare for the shortest route (assuming as the journey is performed by Rail) or the actual amount spent, whichever is less, is exempt from tax.

Following points are considered while calculating tax exemptions:

  • Family includes spouse, upto 2 children, parents, brothers and sisters.
  • Exemption is strictly limited to cost of travelling by Rail, Air or Bus. No other expenditure like scooter, taxi, portage, lodging or boarding are allowed for exemption.
  • No exemption given if family members are travelling without the employee.
  • Exemption from tax is not available if proof of travel is not duly submitted by the employee.
HRBlockIndia
HRBlockIndia
H&R Block India strives to blend tax expertise with a strong focus on continually improving the client experience to provide all its clients with an unparalleled value proposition for filing their Income Tax Online.

1 Comment

  1. Samit Sharma says:

    if i travel by 2nd class ac from delhi to goa, then from goa to mumbai 3rd ac and then from mumbai to delhi economy by air.
    then pls advise how my reimbursement will be calculated?

Leave a Reply

Your email address will not be published. Required fields are marked *