UBS

Leave Travel Allowance (LTA)

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance (LTA) is a salary component given to an employee by employers for travel. 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 policies based on the pay scale, position, etc. Whether a corporation wants to provide LTA to an employee solely or with family is depend on that only.

Rules For LTA:

  • LTA isn’t a common salary component 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 or air is 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.
  • LTA is eligible for income tax exemption as per the Section 10(5) of the Income Tax Act, 1961.

Also, See: Leave Policy

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