Leave Travel Allowance (LTA) – Section 10(5)

Every individual is tired of his routine and really in need of some break. Taking break after working for long time also adds to increased productivity. So the salaried person who is working round the year is surely deserves a break through long & short vacations keeping his work tensions aside. Hence this section entitles to exemption to employee in respect of the value or travel concession or assistance received by or due to him from his employer for himself and his family.

Leave Travel Allowance Exemption

The employee gets entitled for full exemption of Leave Travel Allowance in India only if:

  • The amount spent on travel should be for self, family, wife , maximum of two children, brother, sister and any other person who is dependent upon you
  • The LTA exemption is permitted only for travel within India by any mode of transportation i.e rail, air, train
  • The travel expenses considered for LTA claim is for the shortest route. In case of air travel, the economy class air fare prices are taken into consideration

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Leave Travel Concession Rules

Lets understand LTA exemption rules. Exemption in India shall be allowed subject to following:

  • If the journey is performed by Air – Exemption of an amount not exceeding the air economy fair of the National carrier by the shortest route to the destination.
  • If places of origin of journey and destination are connected by rail and the journey is performed by any mode other than by air – Exemption of an amount not exceeding the air conditioned first class rail fair by the shortest route to the destination.
  • If the places of origin of journey and destination are not connected by rail and the journey is performed by the recognized public transport then the exemption of an amount not exceeding 1st class or deluxe class fare on such transport by the shortest route to the destination. If no recognized public transport system exist then the amount of exemption will be air conditioned first class rail fare by the shortest route to the destination as if journey has been performed by rail.

Restriction for claiming an exemption and carry forward:

LTA Exemption in India can be claimed for two journeys in a block of 4 years. If the assessee is not availing the exemption in any particular block whether for both journey or for one journey, he can carry forward only 1st journey and should claim exemption in the first year of the next block of 4 years. So in succeeding block he can take exemption for 3 journeys. Govt has defined these blocks as 4 calendar years. First block was 1986-1989 continuing these blocks we are into now 2010-2013 block.

Exemption in respect of fare is only allowed and no any other expenses. Family includes spouse and children of the employee and dependent parents, brothers and sisters. If spouse is also working then both husband and wife can claim LTA by that a family can claim 4 times exemption in the block of 4 years, 2 by husband and rest 2 by wife!

Leave Travel Allowance Calculation with Example

Let’s understand leave travel allowance calculation with the help of example.

If Mr & Mrs Vyas traveling to Pune from Bangalore but instead of going directly to Pune, they went Bangalore to Chadhigarh and then from Chandigarh to Pune.

The cost of Ac 3 tier tickets are as follows.

Bangalore – Chandigarh : Rs 1000

Chandigarh – Pune : Rs 800

Pune – Chandigarh : Rs.800

Chandigarh – Bangalore : Rs1000

So total amount Mr Vyas spending here is 7200 for 2 people.

Now AC first class ticket from Bangalore to Pune costs Rs 2500 per head

So the round trip would cost Mr Vyas Rs.10000 in case they travel together. So in this particular case though Mr Vyas haven’t traveled through the shortest distance he can claim full exemption of Rs. 7200 because amount spent by them is less than Ac first class fare by the shortest route.

If Mr Vyas got Rs.12000 as LTA, would it be fully exempt?? The answer would be No because as we saw exemption would be for the lesser of the amount and the fare as defined. So exemption in this case would be Rs.7200 and rest Rs. 4800 will be chargeable to tax.

What happens when both Spouses get LTA

When both husband and wife are working professionals and both of them receive LTA, both of them can claim Leave Travel Allowance (LTA) as per Income Tax Rules. Each spouse husband or wife can claim LTA twice in the block of four years but they both can’t claim Leave Travel Allowance exemption for the same journey.

How to claim LTA Exemption

From now onwards, there is no obligation on the part of the employee to collect evidence for bills of travel and submitting it to the taxation authorities. You can claim LTA exemption only upto the extent of your LTA eligibility. If you have a LTA exemption limit of Rs 25,000 then the maximum exemption permitted to you is Rs 25,000. Now even if you spend Rs 30,000 on your journey, you won’t get a exemption of more than Rs 25,000. Similarly, if you are spending a lesser amount than your actual exemption limit, even then you would be taxed accordingly for the remaining amount. Income Tax Department of India permits only domestic air fare for Leave Travel Concession exemption

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Comments

  1. Vinod says

    If the travel commenced in March (29th March -onward journey) and Ended in April (8th April -return journey) . Whether I am eligible to claim the whole amount in current financial year or I was suppose to claim onward journey during last financial year.

  2. Sandeep Jain says

    Hi,

    What I got to know from my Payroll detp. that “LTA reimbursement is restricted to equivalent train fare for the longest distance through shortest route”. I would like to understand this part… “longest distance through shortest route”.

    Say I traveled from Pune->Kochi->Kanyakumari->Kochi->Pune. Which route would be considered as “longest distance through shortest route”….?
    Pune-Kanyakumari?
    or
    Pune-Kochi?

    Pls suggest.

    Sandeep Jain

  3. Prateek says

    U can revise the returns of 2012 & request a refund…..
    Do conform the last date of revising the returns. It may have been passed…..

  4. Varun Jain says

    Got a question on LTA Reimbursement -

    Made a travel in Aug, 2012 and have Valid tickets with Leaves proof.
    But, did not raise a claim in 2012.

    Now, Need to raise a claim in 2013.
    Is there any rule regarding this? Is it acceptable?

  5. roshni says

    Dear sir

    My hubby’s LTA amt is Rs.70000/- p.a and this amount is part of the CTC.

    i would like to know whether we can get tax exemption of this full amount Rs.70000/- for the year 2013-14???

    Pls reply to my mail id roshninaath@yahoo.com

    Regards

    roshni

  6. nitya says

    hi sir,

    my parents are depended on me.i migrated from delhi to kerala with my in laws and back to delhi my parents accompanied with me to look after my child.so cant i claim ltc one sided for them including mine and my husband to and fro.please do reply.i joined govt. service in 2007 so i am liable to get ltc every year acc. to 6th pay commission rule till 8 years from the commencement of my service period.awaiting for ur favourable reply

  7. Prateek says

    Sir,

    In which FY can we claim the benefits of Income Tax exemption????
    I am working in a PSU & my company provides income tax exemptions once in a block of two years. I have travelled in March-2012. Can i claim income tax exemptions for the block year 2010-11 in the current FY i.e. 2012-13.

    Plz reply soon on my mail id.

  8. Punit Singhi says

    Hi,

    1) Till now I haven’t claimed LTA for the block (2010-2013) , I have travelled to multiple times in 2012 so can I use all the travels for LTA claim or it has be to once?

    2) I did travel in 2011 fro blr- del, can I use tht travel ticket for this year LTA submission.

  9. Chetan Goswamy says

    Hi,
    I travel from Delhi to Mumbai with my family every year for our annual vacation. We travel together to Mumbai and then I normally return after 2 weeks and my family comes back after another 2-3weeks. Can I claim LTA for their return trip even though I was not accompanying them?

  10. Tanu says

    Hi,

    Is it only parents that are covered under the defination of family or dependent parent-in-laws are also covered?

  11. satya parkash says

    I GOT LTC 08-11 BASIC +DA.BUT DID NOT SPEND IN .CAN I ASK FOR EXEMPET IT FROM MY INCOME IN AY 2013-14 PL TELL ME THANKS

  12. RUPESH says

    Hi …You can calculate the fare for the same distance for any other route ….means if distance between Jammu & srinagar is 400 km …..you can check the fare for the same distance using irctc website between two cities situated at a distance of ~ 400 km

  13. Kiran says

    Hi,
    Please can anybody help me with this? I recently(6months passed) switched over to a new job. This company has LTA of 7500pa. My previous company was a Medium scale Enterprise and did not have any LTA.My period of work in first company was Aug’09 to Jun’12. Since then i am with this company. I recently travelled from pune to kerala by air. Now can you please suggest what would be the best option for me. Thanks in advance.

  14. Piyush Suhasaria says

    Hi there,

    As per LTA rules “where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.”

    My question is how to calculate the fare applicable for AC first class between two places which are not linked by any rail route.

    I travelled from Jammu to Srinagar and back through a rented cab. These two places are not linked by any rail route. Now I want to claim the travel expense under LTA.

    Request your guidance. Thanks in advance.

  15. Sudhansu says

    Please advice since my joining that is from 2011 i havnt claimed LTA and want to avail it in 2013 . Can I take for 3 years i.e 2011-13 in a single journey .?

  16. ajay sharma says

    Dear Sir/ Mam
    I JUST WANT TO KNOW IF I AM NOT TRAVELING WITH MY FAMILY , I CAN TAKE EXEMPTION ON FAMILY TRAVEL.

  17. HRIDAY RANJAN DEB says

    DEAR SIR/MADAM,

    I AM GETTING LTA EVERY MONTH SALARY PACKAGE LIKE OTHER ALLOWANCES. WHETHER I AM ABLE TO CLAIM LTA EXEMPTION U/S 10(5) OF INCOME TAX ACT. OR LET ME KNOW WHAT WILL BE THE TREATMENT OF THAT LTA AMOUNT? WHETHER TOTAL LTA AMOUNT RECEIVED BY ME MONTH WISE WOULD BE TAXABLE?
    PLEASE LET ME KNOW.
    THANKS & REGARDS,
    H. R. DEB
    RAIPUR(C.G.)

  18. Gagan says

    I did not take any LTA in current block (2010-2013). Now i want to take both my LTA. One in 2012 nov and second in 2013 feb. Now confusion is that we are getting LTA component financial year wise suppose 20k in 2012-13 FY year. Is that means i can claim only 2012 nov LTA in 2012-13 FY year and 2013 feb LTA in next 2013-14 financial year ? Can’t i claim 40k for both of my LTA in 2012-13 FY only because i am doing journey in different calendar years ?

    And why govt. willingly make this whole LTA process complicated. Is it hard to make it simpler ?

    Thanks,
    Gagan

  19. Shrenikk says

    I have recently joined a bank. Can i claim LTA for journey performed before joining the bank.

    Secondly, my jorney included travel via both rail + air to reach the destination. That is the only option available. So will the cost of travel via both rail + air can be claimed in LTA.

  20. priya shah says

    Hi Sandeep,
    your net home surely will increase but then you are avoiding to take exemption thereby and may be if you are in tax bracket your tax liability will also increase.

  21. priya shah says

    Hi Naveen,
    you will the exemption only after the end of financial year i.e.after 31st march. Your company may pay you immediately.

  22. priya shah says

    Hello Prabhash,

    There is no any such minimum period of leave to be taken to avail exemption.

  23. sandip says

    what happens if I make LTA component Nil…in my salary, upon simulation the nett take home increases if I make LTA component Nil..please advise

  24. naveen says

    Priya thanks. some queries:
    1) Just wanted to know when can we claim the LTA amount (which month of the year- i.e, is it specified). If i have travelled in august 12 can i claim the amount in my company same month and paid same month. Or should i have to wait untill the end of Financial year ie the company has to wait untill March 13 (financial year end) to make that payment to me.
    2) Will the eligibility amount for claim be only uptill August 12 (the month i am taking LTA) or the eligible amount will be only till July 12 the past month.
    PS: currently i am in Aug 12 and taking 5 days PL for Leave travel.
    Thanks.

  25. CA Prabash Tekriwal says

    Very Nicely Explained. I further want to knoe is there any minnimum period period of leave to be taken in order to avail the exemption as per IT Rules.

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