Is LTA exempt from income tax?

Leave Travel Allowance (LTA) is a type of allowance which is provided by the employer to his employee who is travelling on leave from the work to cover his travel expenses. LTA is an important component of the salary of the employee as it is eligible for income tax exemption as per the Income Tax Act, 1961.

How much LTA is tax exempt?

The exemption is also limited to LTA provided by the employer. For example, if LTA granted by employer is Rs 30,000 and actual eligible travel cost incurred by employee is Rs 20,000, exemption is available only to the extent of Rs 20,000 and balance Rs 10,000 would be included in taxable salary income.

Is LTC exempted from income tax?

LTC which could not be spent is taxable in the hands of employee. … Thus, the Government has provided for Income tax exemption on account of value in lieu of Leave Travel Concession whereby a salaried employee can claim tax exemption merely on purchase of certain goods or services by the employee or their family members.

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Is LTA exempt under new tax regime?

The following are the deductions and exemptions you cannot claim under the new tax system: The standard deduction, professional tax and entertainment allowance on salaries. Leave Travel Allowance (LTA)

How do I claim LTA exemption in ITR?

You can claim LTA twice in the block of four years. The current block is 2018-2021. You need to submit the proof related to LTA with the employer to claim the deduction. To claim these deductions while filing the tax return, you are not required to submit any proof with the tax department.

How is LTA calculated in salary slip?

Illustration – If the LTA given by the employer is INR 35,000 and actual eligible cost of travel incurred by the employee is INR 25,000, then the exemption will be granted on only INR 25,000 and balance INR 10,000 would be included in taxable salary income.

What is LTA in salary slip?

Read about the Leave Travel Allowance (LTA) that is provided to the employees for travelling. … The Leave Travel Allowance is an allowance given by the employers to their employees, which can be utilised when they go for a vacation. The employee needs to submit the actual bills to the company for claiming LTA.

Is Tatkal ticket allowed for LTC?

Travel through Premium, Premium Tatkal, or Suvidha trains will be allowed under LTC. The reimbursement of Tatkal or Premium Tatkal charges are also provided for the LTC purpose. Flexi fare applicable on Shatabdi, Rajdhani, or Duronto trains will be allowed if the travel is performed by these trains on LTC.

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What LTC benefits are taxable?

LTA/LTC is a tax break that can be availed by an employee for travel of self and family members anywhere in India. The leave encashment portion is taxable in the hands of an employee. The amount of LTA that can be claimed as tax-exempt is limited to the actual fare of rail/air/bus travel.

How do I claim my LTC cash voucher?

To claim the benefit under the LTC cash voucher scheme, an individual is required to fulfil the following conditions:

  1. The amount both on account of leave encashment and fare shall be admissible if the employee spends: …
  2. Purchases must be made during the period between October 12, 2020 and March 31, 2021.

How much is LTA of basic salary?

Note: The salary structures is updated effective FY 2018-2019.

Component Recommendation
HRA 50% of Basic + DA if metro and 40% if non-metro
Conveyance Rs. 1,600 a month
Medical Rs. 1250 a month
LTA No real benchmark, can even be used as a plug, but if not can set as 10% of Basic

Is LTA and LTC same?

This Leave Travel Allowance (LTA) can be claimed when an employee goes on a vacation and submits the actual bills to the employer. This amount is also sometimes referred to as Leave Travel Concession (LTC).

What is the rule for LTA claim?

LTA can only be claimed on domestic travel expenses. You can not claim LTA on the expenses incurred during the international trip (if any) of the employee. It should be noted that the employee can not claim LTA in every financial year. LTA can be claimed only for two journeys in a block of 4 years.

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Where can I spend LTA money to claim exemption?

The amount of LTA that can be claimed as tax-exempt is limited to the actual fare of rail/air/bus travel. Abhishek Soni, CEO & founder,, an ITR filing website says, “No other expenditure such as hotel bills, local conveyance, sight-seeing etc are covered under the tax-exempt portion of LTA.”

Is LTA included in gross salary?

In order to determine the part of your income that is taxable, subtract allowances (LTA, Conveyance Allowance, HRA), professional tax, medical bills, medical insurance, tax saving investments, if any and other deductions from your gross salary.

What is LTA cash voucher scheme?

Under the LTA cash voucher scheme that is applicable for FY 2020-21, those with an LTA component in their salary, can save tax on taxes by spending a ‘specified amount’ on certain goods, without having to make any trips. … It should have been spent on purchase of goods and services with a GST rate of 12 percent or more.

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