Leave Travel Concession  (LTC/LTA)

Everyone has Leave Travel Allowance (LTA) or Leave travel concession (LTC)  component in their salary.Under section 10(5) of income tax act one can claim tax exemption for travel anywhere in India.This exemption can be claimed for individual as well as his family.

When claiming LTC/LTA there is limit on term family,fare claimed,no of claims,leave etc.Details are listed below. 

Term "Family" in Leave Travel Concession (LTC/LTA)

Family includes spouse, children, and dependent siblings( brother/sister/) and parents. It does not include more than 2 children of an Individual born on or after 01-10-1998.

Fare Limit for Leave Travel Concession (LTC) Exemption

The exemption shall be limited to fare for travel in India along with family twice in a block of four years:

 

1. Exemption limit where journey is performed by Air - Air fare of economy class in the National Carrier by the shortest route or the amount spent, whichever is less

 

2. Exemption limit where journey is performed by Rail - Air-conditioned first class rail fare by the shortest route or the amount spent, whichever is less

 

3. Exemption limit if places of origin of journey and destination are connected by rail but the journey is performed by any other mode of transport - Air-conditioned first class rail fare by the shortest route or the amount spent, whichever is less

 

4.Exemption limit where the places of origin of journey and destination are not connected by rail:

a. Where a recognized public transport system exists - First Class or deluxe class fare by the shortest route or the amount spent, whichever is less

b. Where no recognized public transport system exists - Air conditioned first class rail fare by shortest route or the amount spent, whichever is less.

Leave rules for claiming Leave Travel Concession (LTC)

Taking leave is mandatory for claiming LTA.Below listed leaves qualify for LTA

  1. During Leave only – The concession can be availed during  Earned leave,casual leave,special casual leave ,vacation leave ,study leave ,Maternity leave or paternity leave.

  2. LTA during Leave Preparatory to Retirement (LPR) is permissible if the journey is completed before retirement.

  3. LTA cannot be availed during Child Care Leave. II.

  4. LTA cannot be availed, if the journey is performed during holidays only

 

Leave Travel Concession : LTC block years notified by GOI
Tax treatment on Leave Travel Concession (LTC)

Claimed LTA amount is tax free but in case LTA is not claimed then LTA component in salary is paid at end of every two years after deduction of income tax.