Under the Income tax act various allowance and perquisites are provided to employee by the employer are exempt subject to certain condition. One of which is leave travel concession (LTA) exemption. LTA can be claimed for any two years in a block of 4 calendar years. The current block year for claiming LTA is 2022 to 2025.

Conditions for claiming LTA:

1. Only travel within India is allowed for exemption.
2. The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee.
3. The tax exemption of leave travel allowance is not available in case you choose the new tax regime
4. The amount of LTA/LTC Exemption is available only on the actual travel costs.
5. LTA should be included in the employee’s salary and exemption is subject to LTA allowance offered by the employer
6. The amount of  exemption is limited to the expenses incurred by the shortest route

Note: –

• It must be noted that the travelling expenses of only family member is not allowed where employee claiming exemption was not present.
• The onus of complying with Income Tax provisions lies with the employee.
•  The employee willing to avail LTA benefit, has to produce necessary documentary proof relating to travel expenses.  Where necessary documentary proof is not produced, LTA amount being paid will be taxed fully

Relevant provision contained in Income tax act 1961 with regard to leave travel concession is as follows:-

Section 10(5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—

(a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India,

 (b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,

Explanation 1. —For the purposes of this clause, “family”, in relation to an individual, means—

(i) the spouse and children of the individual; and

 (ii) the parents, brothers and sisters of the individu­al or any of them, wholly or mainly dependent on the individual.

;

Rule 2B. (1) The amount exempted under clause (5) of section 10 in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding,

shall be the amount actually incurred on the performance of such travel

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CS Sanjeev Khurana