Meaning: LTA stands for leave travel allowance; this is provided by an employer to cover the travel expenses of the employee when the employee is gone for a holiday trip. This allowance is exempt from tax under section 10(5) Income Tax Act 1961.
Who can Apply:
1. Spouse of the individual
2. Parent of the individual (mainly dependent on the individual)
3. Children of the individual
4. Brother and sister of the individual (mainly dependent on the individual)
Block years in LTA:
BLOCK NUMBER BLOCK PERIOD
1 1986- 89
2 1990- 93
3 1994- 97
4 1998- 01
5 2002- 05
6 2006- 09
7 2010- 13
8 2014-17
9 2018- 21
10 2021-2024
List of exempted expenses under Leave Travel Allowance:
1. By-Air travel expense: Air travel fare of economy class of national airline by the shortest air route or actual travel expense paid, whichever is less, exempt from tax.
2. Travel exp. by train: The first-class rail fare by the shortest route or actual travel expense paid, whichever is less, exempt from tax.
3. Bus: The deluxe or first-class fare of the available public transport for shortest route or actual travel expense paid, whichever is less, exempt from tax
Limitations of Leave Travel Allowance:
1. LTA covers only domestic trip. An international travel will not be covered under this.
2. LTA is provided to cover travel expenses only.
3. To claim LTA benefit, the mode of transport should be either railway, air or other public transport.
4. An individual cannot claim LTA exemption for more than two children. This restriction will not be applicable if the children are born before 1st Oct 1998.
5. In case of multiple birth, the birth of children after first child will be considered as one child only.
Use-Case:
1. Leave report is must for exemption.
2. Bording Pass ups and down is Mandatory.
3. Only two journey is allowed in one Block year.
4. Family member must add in system.
5. if employee miss the Claim in first year, then you will only one claim for next Block Year.
For Example-
20-2021- Non-Taxable
2021-22- Non-Taxable
22-23- Non-Taxable
23-24- Taxable