Leave Travel Allowance (LTA) is an allowance paid by the employer to the employee for traveling on leave. The good news is, it comes with tax benefits.
Exemption Rules
The exemption is limited to the actual travel cost incurred by the employee. It does not cover accommodation, food, or other expenses.
Conditions
- Travel must be within India.
- Exemption is available for travel with family (Spouse, Children, Dependent Parents, Brothers, Sisters).
- Exemption is limited to 2 journeys in a block of 4 calendar years.
Current Block Year
The current block year is 2022-2025. If you haven't claimed LTA in this block, hurry up!
Travel Mode Limits
Air: Economy class fare of National Carrier.
Rail: AC First Class fare.
Road: Deluxe bus fare.
Carry Forward
If you have not claimed one or both journeys in a block of 4 years, you can carry forward one journey to the first calendar year of the next block. This fits into the "Carry Over Concession" rule.
Conclusion
LTA is a great way to explore India while saving taxes. Plan your holidays in advance and keep your travel tickets safe to claim the exemption.