Most Common LTA Reimbursement Questions Answered

What is Leave Travel Allowance (LTA)?

It’s a common form of tax-saving employee benefit offered by most organizations to their employees. It is a component of an employee’s salary under the CTC (cost to company) against which an employee can claim tax exemption.  The amount in LTA is 100% tax-free.  The exemption, however, is limited to the travel cost incurred by employee. It is not effective for the costs incurred for food expenses, shopping, and other expenses. The amount of LTA can differ from employers to employers.

What is LTA in income tax?

Your salary package includes various components like House Rent Allowance (HRA), Conveyance Allowance, Leave Travel Allowance (LTA), etc. According to the income tax act 1961, employees can claim exemption on the amount spent on travel for a trip in India under section 10(5) of the income tax act.

Can LTA be claimed every year?

No. You cannot claim LTA every year. Instead, it is claimed twice in a block year. The Income Tax Department decides the block year.

What is a block year?

Block years are a period of four years within which you can claim your LTA twice. The current block year is 2018 to 2021. In previous years, 2010-2013 and 2014-2017 were the block years.. The year for LTA starts from 1st January and ends on 31st December.

How is LTA calculated?

Assume that you and your wife are getting a fixed LTA Rs 10,000 as part of the salary. You travel with your child and spouse. The travel expenses come to Rs. 7000/. This amount is claimable for a tax deduction. But, the remaining 3000 is taxable.

At the same time, your wife cannot claim for a tax deduction. Only one person from a couple can receive benefits of LTA at one time. But, your wife can claim LTS for another travel.

Can LTA be claimed for travel outside India?

No, LTA cannot be claimed for the abroad trip. You need to travel within the Indian territory.

Can we claim LTA While filing income tax return?

No, you cannot claim LTA while filing income tax return directly. It is an allowance provided by your employer.

Can you claim LTA for your parents?

Yes, you can. But, you need to be a part of the journey and parents must be dependent on you.

Can you claim LTA for hotel expenses?

No, the amount spent for sightseeing, hotel accommodation, food cannot be claimed for tax exemption

If you have any question about the LTA reimbursement, write in the comment box. We will give you the right answer.