Leave Travel Allowance

What is a leave travel allowance?

Leave travel allowance is paid by the employer to employees for travel on leaves. It is an exemption for allowance/assistance received by the employee from his employer for traveling on leave. Though it sounds simple, many factors need to be kept in mind before planning the travel for the purpose of claiming LTA exemption. Income tax provision has laid down rules with respect to claiming exemption of LTA.

Condition for claiming                                                                                                                

1. The actual journey is a must to claim the exemption                                                                                            

2. Only domestic travel is considered for exemption i.e., travel within India. No international travel is covered under LTA  

3. The exemption for travel is available for the employee alone or with his family, where  ‘family’ includes the employee’s spouse, children, and wholly or mainly dependent parents, brothers, and sisters of the employee. Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiples births on the second occasion after having one child is also not affected by this restriction.                                          

Eligible LTA Exemption                

LTA is available only on the air, rail, or bus fare incurred by the employee. No expenses such as local  conveyance, sightseeing, hotel accommodation, food, etc., are eligible for this exemption                            

Can LTA exemption be claimed on every vacation?

No, an LTA exemption is available for only two journeys performed in a block of four calendar years.

Carryover of Unclaimed LTA

In case an employee has not availed exemption with respect to one or two journeys in any of the block of 4 years, he is allowed to carry over such exemption to the next block provided he avails this benefit,in the first calendar year of immediately succeeding block

Block year

The every first 4 years block commend 1986. List are 1986-1989, 1990-1993, 1994-97, 1998-2001, 2002-05, 2006-09, 2010-13 and so on.

The block applicable for the current period is the calendar year 2018-21.