LTA or Leave Travel Allowance exemption limit, eligibility, restrictions, documents you need to submit: LTA latest rules here
LTA rules can be confusing, especially regarding air travel. ET Wealth Online addresses common queries about LTA for employees.
Who can claim LTA?
Any employee whose employer offers LTA as a part of the salary can claim a deduction for LTA. Employees with LTA as a salary component can claim an exemption under Section 10(5) of the Income-tax Act, 1961, for travel expenses. This includes travel for oneself, spouse, and children during the leave period. Additionally, parents, brothers, and sisters may be eligible if they are wholly or mainly dependent on the employee. Both public and private sector employees are eligible for LTA if it is part of their salary structure, although specific rules may vary.
Employees should review their employer's LTA policy carefully as eligibility, entitlement, and documentation requirements can differ. For instance, central government employees can claim LTA only after completing one year of continuous service. Furthermore, LTA rules for air travel vary for those entitled to air travel compared to those who are not.
How much LTA can be claimed?
An LTA claim cannot exceed the actual amount spent on the travel and the amount paid as LTA by the employer, says Alok Agrawal, Partner, Deloitte India.
Travel expenses for the shortest route between the origin and destination are eligible for LTA, subject to limits. Shalini Jain, Tax Partner, EY India, says, «As per Rule 2B of the Income-tax Rules, only travel expenses (air/rail/road) for the shortest route between the origin and base location
