Leave Travel Allowance (LTA)

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance (LTA meaning) is a salary component given to an employee by employers for travel expenses. It is also known as Leave Travel Concession (LTC). It also helps them save tax on the amount spent on traveling within the country once they are on leave from work.

Every company has different LTA – leave policies based on the pay scale, position, etc. Whether a corporation wants to provide LTA as per the assigned leave policy to an employee solely or with family is dependent on that only.

When it comes to LTA meaning in salary, employees can claim tax exemption on the amount received as LTA, subject to certain conditions and limitations. As an employee if you don’t know how to claim LTA then- As, LTA full form in salary is – Leave travel allowance, employees need to submit relevant travel documents and proof of expenses to their employer to claim it.

Rules For LTA:

• LTA isn’t a common salary component( Not included in  fixed pay)  and an employee can avail of tax benefits under LTA only if the company has included LTA in the CTC.
• LTA can only be claimed on domestic expenses. You can’t claim LTA on the expenses incurred during the international trip.
• LTA can only be claimed on travel cost on all the mediums of the travel i.e. road, rail fare or air claimable under LTA.
• Employee must submit a valid proof of cost to claim LTA.
• Food or stay or other expenses excluding travel can’t be a part of it.
• LTA are often claimed for any 2 journeys in a block of 4 years. Blocks are created by the tax department.
• Income tax department makes LTA eligible for exemption as per the Section 10(5) of the Income Tax Act, 1961.

Also, See: Leave Policy | CIN number | Form 15H | Form 12BB | Exit Interview | HR Toolkit | 5 Factor Model | Cost per hire