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2018

FAQs - Leave Travel Allowance (LTA)

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Leave Travel Allowance aka LTA is a type of allowance provided by an employer to an employee in the form of reimbursement of travelling expenses. Such travelling expenses reimbursed by employer forms part of total salary of the employee. However, an employee can claim tax exemption from such LTA received from an employer. In this article, we have covered most frequently asked questions regarding LTA.

Q 1. Who can claim Tax Exemption for LTA?

ANS: There are two conditions for claiming exemption from amount received as LTA.

1. The person claiming such exemption must have received LTA in the capacity of an employee from his employer.
2. He must have actually incurred travelling expenses.

Q 2.What expenses are covered for claiming exemption under LTA?

ANS: An employee can claim tax exemption only up to the amount spent for travelling. Other expenses incurred during the trip like Hotel accommodation, food, etc cannot be claimed for tax exemption.

Q 3. Can LTA Exemption be claimed for family as well?

ANS: Yes, LTA can be claimed for both employee himself as well as for his family. Family includes spouse and children, whether dependent or not, and parents, brothers, sisters who are fully or mainly dependent on him. LTA tax break is not available for more than 2 children if born after 01.10.1998. This restriction does not apply to children born before 01.10.1998.

Q 4. How many times LTA exemption can be claimed?

ANS: Exemption from LTA can be claimed on twice in a block of four years. If the individual doesn’t take advantage of the exemption within this block, they can carry it over to the next block. However, such LTA must be utilised within first year of the next block.

Q 5. How much amount can be claimed as tax exemption under LTA?

As discussed earlier, only travelling expenses can be claimed for tax exemption. The amount of exemption depends on mode of travel subject to below mentioned conditions:

  • Travel by air - When the destination is connected by air, the exemption is allowed for ticket fares of a national airline's economy class.
  • Travel by train - When the destination is also connected by train, the exemption is allowed for AC first-class tickets
  • Travel by other modes of transport - If the destination is not connected by air or rail, an amount equivalent to first-class, deluxe, or AC first-class fare, whichever is lower, can be claimed for exemption under LTA.

Q. 6. Can an employee claim tax exemption from LTA received for international travel?

ANS: No, Exemption from LTA can be claimed only for domestic travel.

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