Reviewed by: Fibe Research Team
We all love travelling and going on vacations, but what if you could travel and save on taxes at the same time? Leave Travel Allowance (LTA) makes it more interesting. It’s a great employee benefit that helps cover travel costs while offering tax savings. However, there are some rules you need to follow to make the most of it.
Read on to understand everything about LTA — how it works, what’s covered, tax exemptions and how to claim it hassle-free.
Leave Travel Allowance (LTA) is a benefit provided by employers to help employees cover travel expenses for themselves and their families. The best part? It comes with tax benefits. But to take full advantage of this benefit, one needs to understand how LTA exemptions, limits and reimbursement rules work.
LTA allows employees to claim tax exemptions on travel expenses within India. However, expenses on hotels, food or sightseeing are not included in the exemption. It only covers the cost of transportation for:
LTA comes with certain conditions and limitations that are:
To claim LTA without hassle, you need to make sure of the following things:
Also Read: How To Use Travel Loan for Your Dream Destination
LTA is part of your salary and how it is taxed depends on how you use it:
LTA offers more than just tax savings. Listed below are a few LTA benefits:
To get reimbursed for your travel expenses, you need to:
LTA is a great way to save money while enjoying time off with family. Understanding the rules ensures you maximise your benefits without tax complications. Employers also use LTA as a way to keep employees happy and motivated.
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The latest block period to claim LTA/LTC exemption is from 2022 to 2025.
You can claim the LTA exemption on account of 2 trips in 4 calendar years.
An employee can certainly claim LTA when travelling without family. However, since family refers to the spouse, children, dependent parents and siblings of an employee, travel expenses can still be claimed for these trips.
All salaried employees who are entitled to an LTA within the bounds of the salary package may file for an LTA. The claim is submitted as per the conditions and limits specified under the Income Tax Act.