Leave Travel Allowance | LTA Leave Travel Concession |Leave Travel Advance | Rules | Eligibility | Tax Exemption | Maximum Limit Under 7th Pay Commission
Leave travel allowance is a travel benefit given by the employer to his / her employees. The paid allowance does not fall under any tax slab which means the cost of the travel will be exempted from the income tax. It is paid as reimbursement process where employees will enjoy their tour and then they can claim their allowance from the employer. There are definitely some rules and regulations that one must follow to claim the allowance. As the LTA allows the employee to enjoy their travel with family, there are few do’s and don’ts regarding the LTA.
Rules and regulation
LTA is a travel allowance that is paid to the employee for his / her tours with family in a year. The employer will pay the allowance by reimbursement process. There exists some leave travel allowance rules and regulations in this country.
- Only one tour is financed within a year. If the employee is making multiple tours then only one will be paid as LTA.
- Along with the employee, his / her spouse and two kids are considered under the rules of LTA. If anyone has triplet, single kid with twins, then the twins will be considered as one child.
- The LTA does not valid on travelling abroad. One must make a tour plan within the country.
- The minimum limit of the LTA is Rs. 20,000/- and there is no maximum limit as of now.
- Within a year does not mean a financial year, but a calendar year. There is a fixed block of 4 years, in which an employee can claim LTA for every 2-year.
- The LTA is exempted from the income tax. No tax amount is required to pay by the employee.
- If both the spouses are employed then both the spouses can claim LTA for a single tour within a calendar year.
There is no such leave travel allowance rate in the country. Many of the people have this question whether there is any percentage or fixed amount is paid under LTA. The answer is there is no such so called rate or percentage for LTA. The minimum rate for the LTA is Rs. 20,000/- and one can claim more than that. But it depends only on the limit that is provided to the employee. The LTA is provided only for the expenses of the journey that is the cost of the tickets.
- The employee must be a salaried person
- He / she needs to be Indian citizen
- There is a limitation of the LTA on the employee, so the employee will get that much allowance only, not more than that.
- The tour must take place within the country
- Husband and wife, if both are employed, can claim LTA in a same block.
- The LTA will be provided on air fare, train fare and other public transport fare during the journey.
According to the leave travel allowance policy, a salaried person who is travelling with his / her spouse and children or parents or siblings can claim the expenses of their journey from the employer. The employee can take 2 travel allowances in 4 years block. For example 2014-2017 is the current block when the employee can plan 2 travels.
There is no leave travel allowance maximum limit. But each employee is provided a certain limit of allowance. If the employee crosses that limit he/she needs to pay the rest on his/her own. On the other if the employee does not reach to the maximum level he has access to, and then he will be paid only the journey expenses he had, even when it is less than the maximum limit.
Income tax rules
Under section 10(5) of income tax act, as per the rule 2B, the exemption will take place if the employee is travelling within the country, by air (economy class), train or bus or any mode of public transport.
The tax exemption occurs on the minimum fare of the journey. Let a person is availing car from one city to another and it costs 20,000/- on the other the first class AC train fare for same journey is 3000/- then the exempted amount will be the lesser one while the remaining 17000/- will fall under taxable income.
LTA In 7th Pay Commission :
Under the leave travel allowances, one additional railways leave travel concession is given to the defence officers. Compare to others, officers who are serving in high altitude/ fields/ CI Ops will be granted this allowance. Also this will be extended to the officers under CAPF (7th Pay Commission for CAPF) and also Indian Coastal Guards (7th Pay Commission for Indian Coastal Guards ).
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