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Leave Travel Allowance (LTA) is granted to employees to meet the cost of travel, while
on leave from work, to any place in India. The amount of exemption depends upon the
mode of travel. The exemption is allowed only towards the travel fare, and not for
boarding and lodging. It is allowed twice in a block of four calendar years. The current
block is 2010-13. So, for the period 2010-13 you can claim this exemption for any two
occasions.
Pankaj was not able to perform any travel in the previous block, i.e., during 2006-09. He
can carry forward one journey to the current block, i.e., 2010-13 and claim it in 2010, the
first calendar year of the block. Thereafter, Pankaj can also claim the remaining two
journeys of the block 2010-13. In a way, he will be able to avail three exemptions in the
block 2010-13.
What if I failed to claim LTA and my employer has deducted tax on the
LTA amount?
If you failed to claim LTA and your employer has deducted taxes on the amount paid,
you can claim the same in your income tax return. You can accordingly get a refund of
the tax that had previously been deducted.
The above can be summarized in words as the following: If you are traveling by air, then
the economy fare on the national carrier on the shortest route is the amount exempt. If
you are traveling by any other mode other than air, then if the destination is connected by
rail, the first class AC fare by train on the shortest route is exempt. For destinations not
connected by rail, where recognized public transport exists the first class or deluxe class
fare is exempt or where no recognized public transport exists AC first class rail fare is
exempt for equivalent distance.