Leave Travel Allowance
It is defined as an expense incurred towards travel (not stay) in India with your immediate dependant family. LTA is typically paid out at the end of fiscal year (i.e. in March) on submission of bills.
You can choose one of the two payment options – Allowance (taxable) or Reimbursement (non taxable)
Allowance:
It is paid every month as part of the salary. You are not required to submit any bills. The entire amount is taxed.
Reimbursement:
It is deducted from monthly salary and will be reimbursed on submission of travel tickets booked for a single trip (including air travel) for you and your immediate family. The trip should be during your period of leave. The entire amount is exempted from Income tax, twice in 4 years. The years are predefined in blocks of 4 years (Current Block: 1-Jan-06 to 31-Dec-09; Next Block: 1-Jan-10 to 31-Dec-13).
If no tickets are produced, the entire amount gets credited with salary, at the end of the block period and is taken into account as taxable income.
Please correct me if I am wrong :icon1:
From India, Mumbai
It is defined as an expense incurred towards travel (not stay) in India with your immediate dependant family. LTA is typically paid out at the end of fiscal year (i.e. in March) on submission of bills.
You can choose one of the two payment options – Allowance (taxable) or Reimbursement (non taxable)
Allowance:
It is paid every month as part of the salary. You are not required to submit any bills. The entire amount is taxed.
Reimbursement:
It is deducted from monthly salary and will be reimbursed on submission of travel tickets booked for a single trip (including air travel) for you and your immediate family. The trip should be during your period of leave. The entire amount is exempted from Income tax, twice in 4 years. The years are predefined in blocks of 4 years (Current Block: 1-Jan-06 to 31-Dec-09; Next Block: 1-Jan-10 to 31-Dec-13).
If no tickets are produced, the entire amount gets credited with salary, at the end of the block period and is taken into account as taxable income.
Please correct me if I am wrong :icon1:
From India, Mumbai
Hi,
I agree with neha, but for LTA is exempted from tax for 2 yrs in a block of 4 year. There is a limit on the number of trip i.e. u can travel in India twice in a block of 4 yrs. Further as per the recent judgement of Supreme court, employee is not required to submit bill but just give declaration of his/her stay & trveling expenses. He will have to preserve these bills with me.
And the other thing allowance received MAY also exepmted if it is Local Traveling Allowance (conveyance alloance) upto Rs. 800 p.m. without submitting any bills.
Warm Regards,
Divya
Join my SMs chanel on income tax. It’s Free
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From India, Mumbai
I agree with neha, but for LTA is exempted from tax for 2 yrs in a block of 4 year. There is a limit on the number of trip i.e. u can travel in India twice in a block of 4 yrs. Further as per the recent judgement of Supreme court, employee is not required to submit bill but just give declaration of his/her stay & trveling expenses. He will have to preserve these bills with me.
And the other thing allowance received MAY also exepmted if it is Local Traveling Allowance (conveyance alloance) upto Rs. 800 p.m. without submitting any bills.
Warm Regards,
Divya
Join my SMs chanel on income tax. It’s Free
<link outdated-removed>
or
Send JOIN INCOMETAXONLINE to 9870807070
From India, Mumbai
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Leave Travel Allowance.doc
The Ins & Outs of Leave Travel Allowance.pdf