What can be claimed as expenses for leave travel allowance?

Salaried Employees who get leave and travel allowance as a part of their CTC, can claim a tax deduction on the expenses incurred during the travel. This tax break can be claimed for travel of self and members of the family for the journey undertaken within the country. The tax rebate is subject to certain terms and conditions as this is not included under one’s taxable income.

Many expenses incurred during travel, like local conveyance, sightseeing, food etc. qualify for tax rebate. Read on to know more:

Train Journey:

The leave and travel allowance amount are eligible for tax deductions if the ticket booked is in the lower of the air-conditioned first-class fare of the shortest route or the actual amount spent, whichever is less. A similar rule applies to a journey taken by any other mode like a bus or private taxi if the place of origin and destination are connected by rail.

Air Travel:

If the air travel is undertaken in the lower economy class fare in any national carrier plane, then the amount can be considered under tax rebate. However, the tax rebate is provided in consideration of the actual amount spent on tickets and the lower-class fare, whichever is less.

Multi-Destination Journey:

Travelling isn’t just prohibited from one place to another. A person may have to travel to multiple locations on a single trip. When you take such a circular journey to different places, the LTA tax rebate provided for the journey will be from the place of origin to the farthest point that you went on your trip by the shortest route.

Other Travel Modes:

Many times, the place of origin and the destination are not connected by air or rail. So, the journey has to be taken with a different mode of transport. In cases like this, the LTA tax exemption is available only if: The exemption allowed will be either first class or deluxe class fare or the actual amount spent, whichever has the lower fare by the shortest route.

Other than these expenses there are many other ways a salaried can enjoy the benefits in the LTA. For instance, if an employee has not availed LTA for a single or two permitted journeys in a particular block of 4 years, then he can carry one journey over to the next block which means that in the next block he will have three permitted journey’s that will qualify for tax exemption.

How to Claim LTA Tax Exemption?

To avail tax exemptions under LTA, the employee must provide evidence of the employer. In case you don’t travel, the LTA amount gets paid as a part of your salary after tax deduction according to the slab you belong to. Moreover, if you don’t take any journey, there is no tax exemption available to you.

Consult us