What is a leave travel allowance?

Leave Travel Allowance is one of the best tax-saving tools that an employee can avail. It is a tax exemption offered by employers to their employees. Leave Travel Allowance as the name suggests is an allowance paid to the employee by the employer when the former is traveling with their family or alone.

How leave travel allowance is calculated?

Illustration – If the LTA given by the employer is INR 35,000 and actual eligible cost of travel incurred by the employee is INR 25,000, then the exemption will be granted on only INR 25,000 and balance INR 10,000 would be included in taxable salary income. The journey to the destination is undertaken via air travel.

What is the difference between leave travel allowance and leave travel concession?

This Leave Travel Allowance (LTA) can be claimed when an employee goes on a vacation and submits the actual bills to the employer. This amount is also sometimes referred to as Leave Travel Concession (LTC).

How does a travel allowance work?

A reimbursive travel allowance is an allowance which is based on the actual distance travelled for business purposes (excluding private travel). These amounts are normally paid by an employer to an employee by multiplying the actual business kilometres travelled by a rate per kilometre.

Is LTA compulsory?

Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit to employer based on LTA policy of the company/to tax authorities on demand.

Can LTA be claimed without taking leave?

If the place of origin and destination of the journey are not connected by rail but a recognised mode of transport exist for the route then the first class or deluxe class fare for the shortest route for the recognised mode of transport or the actual expenses incurred, whichever is less, is eligible for tax exemption …