How is my LTA Taxed?

Leave Travel Assistance (LTA) has got a tax treatment which is quite different from all the other type of allowances and perquisites that you get. And that’s the primary reason it is the one that gets people confused more often than not.
The following points need to be kept in mind while taking the LTA or producing bills for it to get  LTA Exemption:

Can We Claim LTA Every Year?

One of the most common questions about LTA is whether it can be claimed every year or not? The answer is Yes – you can claim LTA every year, but you will not be able to claim LTA exemption ever year.

Other Points About Tax On LTA

  1. If you do not wish to claim LTA in one particular year you can have your employer carry forward your LTA for the next year.
  2. For getting LTA tax exempt you will have to produce bills, but you can’t get your LTA exempt every year.
  3. You can get your LTA exempt twice in a block of four years. Right now the block that is relevant is 2006-2009. This block is decided by the Government so does not have a bearing on when you start your job and also these blocks are calendar years and not financial years.
  4. The bills can be air, rail or even a private rental company however the exemption is only for domestic travel so an international ticket won’t do.
  5. The bills have to be for a journey that has been undertaken when you are on leave and should be for you and your family that is spouse, children and dependant parents, brothers and sisters. Its obvious that your family can’t claim the exemption if you have not accompanied them.
  6. If you and your wife both get LTA – both of you can’t claim exemption for the same travel but you can avail exemption independently for different travels. So effectively between the two of you, you can claim exemptions four times in four years.
  7. If for some reason you fail to claim LTA exemption in the bucket of four years – you still have the option to claim exemption in the first year of the next block.
  8. Only travel bills can be used for LTA exemption, so a hotel bill can’t be produced for claiming LTA exemption even though you might have stayed in the hotel during your leave.
  9. The maximum LTA for the purposes of LTA tax exemption is Rs.20,000 so normally most organizations design the salary structure in such a manner that they don’t give the employees more than Rs. 20000 as LTA.
  10. In terms of proof for air travel – although there is no fixed rule as such, it might be a good idea to preserve the boarding pass along with the ticket to make sure there are no problems in claiming LTA exemption later on.
  11. LTA can only be claimed for the shortest distance between two places. So if you are planning to travel from Goa to Mumbai then you will be allowed exemption on tickets from Goa to Mumbai and back. You will not be allowed to produce tickets that are via some other place like Mumbai to Hyderabad and then from Hyderabad to Goa and so forth.
  12. LTA can only be claimed on tickets or rented private vehicles, you cannot show petrol or diesel vehicles for your own vehicles and then claim exemption on it.

The above are just some of the points that need to be kept in mind while discussing LTA exemptions. Because tax rules keep changing it is best to discuss with a professional before taking any decision.

We encourage you to ask questions related to LTA or any other tax or financial matter, and we would try our best to provide a solution to it.

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101 thoughts on “How is my LTA Taxed?”

  1. Hi, my name is anup roy. I work in Delhi in a mnc company. I have joined in feb. 2017 this year. my LTA is 20950 rs pa. I am planning to claim my LTA next year January 2018. If suppose I submit only Rs 5000 bills to the company during that time ,then how much amount I will get from 20950? pls give me the answer anybody as I am completely new to LTA.

  2. sir
    LTA amount is it uniform to all states in india or different on state wise?
    I work for a company in Bangalore. They have been giving me salary from Kolkatta. My professional tax deducted in Kolkatta. PF in a trust at AP. LTA they give me yearly 6 percent on basic salary. I do not get family package LTA as they say it is not permitted. But ask me to fill up the LTA forms and do not reimburse actual train or airfare from point to point onward and return journey. Please advise what my employer is doing is right? I have been with them for past 12 years and LTA is given in this fasion. your article gave me some insight into this practice. The company i work is group company diversified interest in business. LTA amount is it consolidated payment for block of 4 years or is it every year. please enlighten me. rgds

  3. Hello,
    I travelled from Bangalore to Bangkok ( and back ) for my leave. The ticket raised by Indigo had a single PNR number and a total invoice value. However, it was basically two flights – one from bangalore to calcutta and the other from calcutta to bangkok and I was given two seperate boarding passes. But indigo is refusing me to provide a billing breakup for the bangalore to calcutta flight, hence I cannot claim the tax exemption. Please suggest.

  4. Hi Manshu,
    I had travelled with my family from Pune to Puri to Thiruvarur to Pune by road in a rented car.
    How do I claim for LTA and will this be a valid case for LTA exemption ?
    Eagerly awaiting your comment.

  5. I get LTA Rs .10000/- p.a . I have not claimed since last 4 years. My accumulation not is Rs.40000/- can i make tour expenses of Rs.40000/- and product the bill of Rs.40000/- for claiming tax benefit

  6. Dear Sir,
    I am planning to go for a travel from Bangalore to hyderabad,

    1) My travel Plan is Bangalore to Vijayawada to Hyderabad to Bangalore.
    2) I will be travelling by my Car
    3) Can i claim Tax Exemption for the Travel from Bangalore to Hyderabad.

    P.Pramod Babu

  7. For LTA claim I missed the boarding pass but I can download the ticket from the airlines site which have all the details as PNR no., cost etc. Is it a valid document for claiming LTA?
    Thanks in advance.

  8. Hi, My company does not provide us the LTA as part of Salary, still i want to claim it. can i claim it ?please help ?

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