LEAVE TRAVEL ALLOWANCE [ SEC-10(5)]
- MEANING : LTA may be provided by the employer to the employee and his family-
- In connection with his proceeding on leave to any place in India, while in service.
- proceeding to any place in India after retirement or termination from services.
- FAMILY OF AN INDIVIDUAL MEANS
- Spouse and children of an individual and,
- parents ,brothers and sister of an Individual or any of them ,wholly or mainly dependent on the
- CONDITION FOR BENEFIT
- An individual can avail the benefit of LTA offered by his employer, twice in a block of 4 year
- The present block of 4 year applicable for assessment year 2013-14 is calendar year 2010-2013.
- If an individual has not availed the benefit twice in a block of 4 years ,the 1st LTA availed in the next 4 year block can be taken for the previous block.
- This exemption is available only for 2 children of an individual born after 01.10.1998. There is no restriction for children born before 01.10.1998, and also in case multiple birth after 1 child.
- COMPUTATION FOR EXEMPTION FOR LTA:
The maximum level of exemption is the cost of travel on the shortest route. The exempt amount for various travelling modes are calculated in the following manner-
| MODES OF TRAVEL | CLASS OF TRAVEL | AMOUNT EXEMPT |
| AIRWAYS | Economy class | Travel charges on the shortest route collected by national airways |
| TRAIN | I class AC | Travel charges on the shortest route |
| RECOGNISED TRANSPORT | Deluxe CLASS | Travel charges on the shortest route |
| OTER TRANSPORT | – | I class AC fare as per railways, equivalent for the distance for the distance for shortest route |
Any sum received in excess of the above is taxable under the head “salaries”
- WHEN TAXABLE:
- LTC encashed without performing journey is fully taxable.
- Expences reimbursed other than the fare is fully taxable.
- Amount received from the employer in excess of the cost of travelling on the shortest route is taxable.