Tax Exemption for LTA (Leave Travel Allowance)

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LTA Exemption
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LTA Exemption

• Can I get tax exemptions for travel expense?
•  
• Yes, you do get an exemption from tax on the
  amount that you spend on journeys.
• Leave travel allowance is an allowance given to
  an employee to meet the expenses of journeys.
• LTA exemption can be claimed only for two
  journeys, in a block of 4 years and is limited to
  the amount actually spent on journeys.

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LTA Exemption

• To claim this deduction you have to preserve the
  journey tickets as a proof.
• Even if you and your spouse undertake more than
  one journey, you two may claim this deduction
  with your respective employer for two journeys
  each in a 4 year block.
• This ways you can maximize your deduction and
  reduce tax liability.

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LTA Exemption

• Example
• Kunal and his wife Swati travel to Kullu Manali
  on a vacation in the month of May 2015 spending
  Rs.15,000 on flight journeys and then again to
  Kerala in October 2015, spending Rs.20,000 on
  flight journeys.
• LTA received by Kunal for the year is Rs.20,000
  and by Swati is Rs.10,000.
• The deduction will be limited to the amount of
  LTA received or amount spent on journeys
  whichever is less.

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LTA Exemption

• Continued..
• Hence if Kunal claims LTA deduction for Kerala
  journey then he will get an exemption of
  Rs.20,000 since he spends Rs.20,000 on his
  journey.
• Swati, his wife on the other hand will get an
  exemption of Rs.10,000 only for the journey made
  to Kullu Manali since her LTA received is
  Rs.10,000 even if the amount spent is Rs.15,000.

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LTA Exemption

• Continued..
• There is a condition in the IT Act that the
  amount allowed as exemption will be for the
  shortest route between the two destinations.
• Also now that Kunal and Swati have availed of an
  exemption in 2015 they can claim exemption only
  once each in the block of 2015 to 2019. 

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LTA Exemption

• Thank You..!!
• For more info https//www.hrblock.in/